Fix your CNG costs ahead of time, save big bucks filling up your trucks down the road
| June 06, 2014 |
Fuel prices fluctuate dramatically and that price volatility is a source of concern to construction companies with even small fleets. One way to eliminate that variable line item is to fix the price of fuel. That’s where fleets running vehicles on compressed natural gas (CNG) have a huge advantage.
CNG’s price per gasoline-gallon-equivalent (GGE) is relatively flat compared to gas and diesel. And because of the abundance of CNG under our own soil, industry experts say it will probably remain so for the next five to 10 years.
Fixing the price of what you pay for CNG is just a matter of striking a contractual agreement with a local CNG provider. In exchange for a set fuel price, they become your only fuel source over an agreed-upon time period.
Today’s CNG price at public filling stations runs about $2.25 GGE. Companies with fleet contracts should be able to negotiate shaving $0.50-$0.75 GGE off that price. (To get an idea of the possible savings, take a look at this calculator.)
“On top of that, if the alternative fuel tax incentives are re-instated again this year, businesses can take another $0.50/GGE for the rebate,” said John Coleman, fleet sustainability and technology manager for Ford Motor. “That could bring the cost of CNG down to as low as $1.00 GGE in some locations.”
With the cost of the typical pickup/van CNG conversion running around $9,500 to $12,000, even without the government tax incentive Coleman says you would have an ROI in around 70,000 miles with a fixed-price CNG contract that saves $1.50 GGE off today’s gas and diesel prices. If conventional fuel prices rise over the next five to 10 years, the ROI comes even quicker.
Another possible upside: the CNG vehicles under the contract would refuel at the provider’s refueling site, so there’s no added infrastructure cost to your company.