With oil price hitting US$100 a barrel before easing slightly, I wonder if there will be another round of petrol price increase soon. It has become more and more unbearable to drive a car, as petrol price has gone up by at least 20% in the last 1 year. So if you are pumping 98 octane petrol and driving a car with a 50 litre tank, you will be paying some S$20 more per tank. So if you pump and average of 4 tanks a month, you will be paying close to S$1000 more per year.
This may be lose change for some people, but for the majority, this is a significant amount. And for those who travel more, the amount obviously goes higher. I reckon I will be paying in the region of S$1500-S$1600 more every year as a result of the increase, and this is if there are no more increase, which seems impossible. According to ‘analyst’, oil price could hit US$120 before it comes down. By the end of the year, there could be possibility of it dropping to US$80 per barrel. Even if it is so, is there a chance for petrol price to come down? I personally feel the chance is very low. They will probably tell you operation cost has gone up more than the petrol cost, and the increase in petrol price just help to offset part of the operational cost increase.
So what is the alternative? Take public transport? But for those who are used to driving, this is an extremely difficult step to take. Change to a smaller CC car? If you are single, it will probably be easier to do that compare to if you have a family, for practical reason. Change to a more fuel efficient car? If you have taken full 10 year loan (with full amount) during the time where 10year loan was first allowed, many will be caught in a situation where their outstanding loan is more than their current car value, thus they will either choose to take cash rebate to ‘top up’ the difference, or to come out with their own hard earned cash, or to do over-trade. Any of this method puts additional financial strain on the car owner, especially if you take the cash rebate or do the over-trade. So consider carefully if this is the right choice for you.
The last method (that I can think off) is to convert your car to use CNG. Currently this does not seems like a good choice as the only CNG station is in Jurong island. But with the expected opening of a station in Jalan Buroh and Mandai in 1st quarter 2008 and another 2 stations by end of the year. Conversion cost is anywhere from S$2000 to maybe S$4000, you will have to email to the company doing the conversion with your vehicle make to see how much it cost to convert your vehicle. Typical ROI (return of investment) is around 2 years, but depending on how much you travel, it could be longer or shorter. Some owners reportedly say converting to CNG helps them save as much as 50% of their fuel cost. So taking my earlier example, there is a potential savings of more than S$2000 in the first year alone. A conservative figure of S$1000 savings per year should be easily achieved. The downside is, again, depending on car make, you might need to sacrifice boot space for the CNG tank.
Contrary to what many might believe, CNG is less flammable than petrol and the tank is usually stronger, thus leakage is less possible. So CNG on the whole is a safer fuel than petrol or gasoline. So the myth that putting a CNG tank in your boot is like putting a bomb in your car holds no water.
So will I consider converting to CNG? Well, once the Mandai station is up, I may give it a serious thought. With the amount of petrol going into my tank every year, I foresee myself getting my ROI in less than 2 years easily. So it makes perfect sense. Oh, just in case you are wondering if your CNG tank goes empty and the CNG station is nowhere in sight, the petrol will actually kick in to continue to supply fuel to your engine.
So, what will be your choice? Think about it and see if you need to do anything to ease the current petrol ‘crisis’.
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