The reduction of CNG supply could affect the operations of environmentally friendly buses in HCM City. Photo courtesy of sgpp.org.vn

HCM CITY – Environmentally-friendly buses in HCM City could face operating problems as compressed natural gas (CNG) suppliers plan to reduce CNG supply, according to local authorities.

Buses running on CNG instead of diesel fuel have brought economic and environmental benefits to HCM City.

However, in late May, the Southern Gas Trading Joint Stock Company announced that it would reduce by 20 to 30 per cent CNG gas supply for city buses for the rest of the year. It said it needed to prioritise gas supply for the electricity industry.

The company said it would inform HCM City two hours in advance before it reduces supply so that the city would have time to adjust bus schedules.

In addition to the reduced CNG supply, the Petro Viet Nam Gas South Đồng Nai Company previously sent an “urgent notice” to several HCM City bus units, saying that gas supply would be terminated if they did not sign a new price-increase contract.

Since there were no other gas suppliers, the bus units had to agree to sign the new contract.

The HCM City Management Centre of Public Transport, under the Transport Department, said the CNG gas supply reduction would disrupt public transport activities and jeopardise investors’ willingness to invest in CNG buses.

The Department of Transport has urged the Southern Gas Trading Company to not reduce CNG gas supply for city buses in 2019.

The department also suggested that the Việt Nam Oil and Gas Group reserve a stable amount of gas for public transport and offer it at the same price for electricity production.

Monopoly

About 2,457 buses are in operation in HCM City, 428 of which use CNG.

According to the city’s bus renovation investment roadmap between 2018 and 2020, the city needs an additional 3,121 buses, 75 per cent of which are expected to run on clean fuel.

For many years, the Southern Gas Trading Joint Stock Company has been HCM City’s only CNG supplier.

Since the issue concerns many bus transport units, the city's Department of Transport reassured bus owners that it would collaborate with more gas suppliers.

However, the Southern Gas Trading Joint Stock Company continues to be the only supplier.

According to transport experts, the Transport Department should work immediately with the current gas supplier to clarify existing issues.

The department should seek another two to three suppliers to avoid a monopoly held by Southern Gas Trading Joint Stock Company, they said.

HCM City also should draft long-term solutions to remove challenges for cooperatives that previously agreed to invest in CNG buses, they said.

In response to this, the HCM City Management Centre of Public Transport is working with the Southern Gas Trading Joint Stock Company to upgrade and relocate existing CNG gas refuel stations to appropriate locations.

The management centre will focus on stabilising the supply and price of CNG for public transport on buses. – VNS