Monday, 30 June 2008

Proton, Gas and the Government


The fuel price increased had attracted various opportunists for cheap publicity but it did not attract any effort by our Prime Minister or its cabinet Ministers to find means of overcoming the public’s burden in absorbing the price increase of most essential items except for the RM625 one-off subsidy for road tax rebate which cannot even pay for the increase in chicken price annually let alone the petrol price hike.

Amongst the many opportunists is our very own Proton whom made headline for its plan to fit the Waja, Saga and Persona with NGV (Natural Gas for Vehicles) kits by year-end. These NGV kits will be installed at the production level and will come with a warranty.

For the warranty to be extended with the NGV fitment, Proton Edar authorised workshops must be sanction to undertake the NGV service and repair. The mechanics and technician has to obtain special licence and the workshop must apply for special permit to service gas engine. The workshop also requires special tools for the service. Currently, none of Proton Edar service dealer network is authorised for NGV servicing or even aware of any administrative requirements to obtain the mechanic licensing or permit for the workshop. The process and procedures for the application may take longer than the expected year end for launching of Proton vehicles with the NGV kit installed. If these are not resolved, how do we expect the customers to be able to claim any warranty or servicing associated with the NGV vehicles.

But assuming the licensing and permit administrative procedures are complied with and in the absence of great thinkers in the Government or the ‘4th floor’, does Malaysia infrastructure is ready for gas? With Proton and other car manufacturer following Proton's moves for gas, soon there will be an influx of NGV vehicles.

To keep the electricity price low, the government during Tun Mahathir era did not allow gas price to be increased. The government decide the price of gas to be sold to power stations. Petronas sustained losses from the low gas price but not as much under Tun’s Government given the crude prices were only around US30 dollar per barrel then. Today, it is US139 dollars per barrel. The cost of gas, likewise had increased and the losses suffered by Petronas is much higher but then this is again for the Abdullah’s Government and Petronas to resolve. Hints.. gas price may increase soon too…

Petronas also supplies NGV for motor vehicles but the amount is limited because the sale of NGV incurs a big loss in profit to Petronas as there is no reimbursement by the Government. Other oil company refuse to sell gas as they would also lose money given the low gas price that was fix during Tun Dr Mahathir’s government, hence, if all car manufacturer start producing vehicles with NGV, the price of gas may be increased to make it attractive for Petronas and other oil company to provide gas at all the petrol stations.

Currently there are very limited petrol stations providing gas for vehicles which is mostly used by taxis. Once Proton began selling cars with NGV kits, consumers will be burden with limited source for petrol stations with gas supplies and may have to queue a few kilometres long with all the taxis to refuel their gas. Notice the queue at all petrol kiosk (such as the one near KLCC and kelana jaya) with gas supplies.

So really, does the NGV kit by Proton and other car manufacturer the answer for the public outcry due to petrol price hike? A proper planning preparing the authorised workshop dealers network for NGV vehicles service licensing, permits and training and an affordable price for the NGV kit alone will not ease the public burden. The Ministry of Domestic Trade & Consumers Affair has to ensure that all petrol stations are able to supply gas and more importantly, can Petronas sustain the loss in profit from the increase in sales of gas to the public, or will there be a gas price revision to attract other oil company to supply gas at their petrol stations for the convenient of the public. With the possible price revision, what will happen to proton vehicles with NGV fitment?

Unless the Government spearhead the gas as an alternative to cheaper fuel for cars, Proton and various other automotive manufacturers move towards NGV will just be another failure. But thumbs up to Syed Zainal and Proton as well as other car manufacturer for the effort to ease the public outcry.

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