Slow sales hit gas industry

Press, 27 April 1989, Page 17

Slow sales hit gas industry

PA Wellington Plummeting sales of compressed natural gas have led to demands for Government protection for the gas industry. The Gas Industry Association president, Mr Derek Johnston, said yesterday C.N.G. sales were down 42 per cent on three years ago.

He said the industry was likely to become further depressed when the tax on diesel was dropped 7c a litre in July. The industry is pressing the Government to protect the C.N.G. and liquefied petroleum gas industries because, with diesel prices coming down, fleet owners such as bus companies could decide not to convert to C.N.G. Mr Johnston said the industry had recently met the Environment Undersecretary, Mr Peter Dunne, to press the merits of C.N.G. and L.P.G. as clean fuels.

The association has also written to the Minister of External Relations and Trade, Mr Moore, after hearing of his enthusiasm about a big joint venture deal between New Zealand and the Soviet Union to convert vehicles to alternative fuels. The letter said that New Zealand had been a

world leader in alternative fuel technology but there was a danger that expertise here would decline with the downturn in the industry. This would weaken our opportunities to sell alternative fuel technology overseas. The president of the Motor Trade Association, Mr Chris Kirk-Burnand, said C.N.G. sales at his own service station in Johnsonville had dropped 20 per cent in the first months of 1989 compared with a year ago. He said gas suppliers were setting tougher conditions on price so that when there was an increase it was several cents and this weakened C.N.G. in the market. “It was an industry nurtured by the Government. I find it incredible that they are walking away from it.” He said it was possible that oil companies owning sites might decide to concentrate on petrol and diesel and give up supplying C.N.G. and L.P.G.

Individual owners could not afford to give up equipment costing $300,000 to $400,000. The Taxi Proprietors’ Federation secretary, Mr George Tyler, said he did not think taxi-drivers would convert to diesel.