Manila Gas: Alternative fuel for a cleaner environment

Jerome Guiterrez, Manila Autogas Enterprise Corp. president and CEO, wants his children to live and grow in a cleaner environment.

To accomplish this goal, he engaged in a business of auto gas refilling which, he believes, can help in this endeavor.

Guiterrez’ family is not new in this trade. He is part of the family that runs CATT Gas Corp., a pioneer in LPG household refilling and an industrial gas supplier which has been in the industry for 30 years now.

Two years ago, Guiterrez took over the operations of CATT Gas and established the first all-Filipino auto gas company in the Philippines after their enterprise won the government’s bidding for Manila Gas Corp.

"Our family is not new in this kind of business. We actually started out the gas refilling business more than three decades ago. Several years back, I went into auto gas refilling but during that time, it wasn’t right yet to introduce auto gas because the conversion was very expensive," says the young entrepreneur.

A couple of years back, when he saw the advent of the autogas industry, he decided to renew his venture and pioneered the automobile LPG conversion in the Philippines.

Todate, Manila Gas, which corners 25 percent of the auto gas market, has been able to convert at least 35,000 taxis and about 5,000 private vehicles in Metro Manila for the past two years.

Guiterrez notes that some 27,000 taxis are waiting to be converted. There are about 150 taxis that are being converted into LPG-run vehicle every week.

Taxi operators opt to convert their vehicles into LPG-run ones due to the savings that they could generate from using this technology as LPG as a fuel is relatively cheaper or lower by P20 per liter compared to unleaded gasoline.

A significant amount of savings, Guiterrez boasts, is one of the main factors why he is proud to be part of this sunshine industry.

"Our clients, mostly taxi fleets, enjoy P600 to P700 a day savings from using auto gas," says the Manila Gas executive.

There are 425,000 private vehicles in Metro Manila. If all these will be converted, there would be a need to put up 255 stations to meet the demand.

The price of conversion from the use of gasoline to auto gas, Guiterrez says, has also gone due to competition. "Prices had gone down by 10 percent and may go down further as the number of units increase," he notes.

He says a conversion kit now ranges from P20,000 to P25,000 depending on where it is sourced. There are three kinds of converters in the market today those coming from Turkey, Italy and Korea. At present, Korea produces the most number of auto gas converters but the number user is Italy.

With the growing conversion rate, current demand for LPG stands at six million liters a week or a monthly demand of 800,000 liters.

Half of the LPG being used by Manila Gas for its auto gas refilling business is imported from Malaysia. The remaining requirement, he says, is being sourced locally through a tie-up with Pilipinas Shell Petroleum Corp., one of the country’s oil refiner and second largest in the industry.

Seeing bright prospects of the auto gas industry, Manila Gas expects to pour in about P100 million to boost its capital and put up at least six refilling stations throughout the metropolis.

In 2006, Manila Gas was able to put up seven stations in Edsa, Makati, NIA Road, Parañaque, Coastal Road and Muntinlupa.

"Our vision is to be the chosen LPG auto-refilling station in Metro Manila and eventually nationwide," says Guiterrez, who envisions to increase its stand-alone stations to 12 from six.

Aside from the stand-alone stations (refilling stations which are solely dedicated for autogas refilling), the company, he says, has plans to put up 12 kiosk-type stations. Kiosk stations are those gas refilling facilities that are being set up within an existing gas station.

For instance, Manila Gas teams up with CitiOil to set up a Kiosk auto refilling facility in its fuel retail station.

At present, Manila Gas has seven strategically located kiosk-type stations along Visayas Avenue, Araneta Avenue, Taft Avenue, Quirino Avenue, Commonwealth Avenue, Marcos Highway and Taguig Service Road.

Guiterrez believes that there are still other opportunities in the auto gas industry aside from putting up kiosk and stand-alone stations.

Some of these prospects, he says, are the construction of conversion hubs, franchising, dealerships and joint ventures.

"This is a growing industry. Most of our Asian neighbors are seeing the benefits of using this kind of alternative fuel for their vehicles. All taxis in Singapore are run by LPG," he notes.

Safety concern on LPG, he says, is a myth related to the use of LPG as a cooking gas in households.

"LPG is safer as it easily evaporates. LPG tanks installed in automobiles are equipped with proper safety measures," he stresses.

He says appropriate mechanisms like gas leak indicators are also put in place to ensure the safety of the LPG tanks.

"There is also a device that allows 80 percent refilling of the LPG tank. This ensures that there would be over-refilling of the tank," he adds.

As part of its extensive information drive on the use LPG in the transport sector, he says, regular seminars are being conducted to inform the public and its customers about the misconception on the use of LPG in cars.