Fuel retailer: CNG not unduly pricier than household natural gas

Estonian bus running on bio-CNG, or biogas.
Estonian bus running on bio-CNG, or biogas. Source: Siim Lõvi/ERR

While the price of compressed natural gas (CNG) sold for vehicles at gas stations is one third more expensive than regular natural gas sold for household use when calculated per kilogram, fuel retailer Alexela nonetheless says that the price isn't unjustifiably high.

Kalvi Nõu, energy portfolio manager at Alexela, explained to ERR that they are offering natural gas for household consumption at a price of €0.84 per cubic meter, which based on a density of 0.7 kilograms per cubic meter converts — dividing 0.84 by 0.7 — to €1.20 per kilogram.

CNG being sold at gas stations, meanwhile, is currently going for €1.80 per kilogram.

"But it cannot be ignored that gas stations, like all other gas consumers, also have to pay network fees and gas excise duties," he stressed.

CNG sales at gas stations involve other expenses as well.

"CNG is a high-pressure gas," Nõu explained. "The gas is compressed by powerful compressors at gas stations into cylinders at a pressure of 200-300 bar. This likewise involves significant electricity costs, and customers naturally also want to visit a clean gas station, look up their closest CNG station on the company's website, meaning the addition of incremental costs tied to a gas station's management, staff, equipment and maintenance."

Speaking to ERR, Marek Piiroja, director of the Legal Department at Estonia's Competition Authority, likewise said he believes that the higher price of high-pressure gas is due to the greater expenses involved in its sale.

Its transport to gas stations is more expensive than natural gas supplied by pipes, and offering it requires ensuring its safe handling, cylinders for storage as well as the organization of its sale.

The Competition Authority doesn't monitor the CNG market, as it is not required to do so by the Natural Gas Act, which only regulates activities related to the import, transmission, distribution and sale of gas delivered through the natural gas grid.

CNG is natural gas that has been compressed 200-300 times. The primary component of natural gas is methane, which in Estonia is already obtained to a significant extent as a product of the decomposition of biowaste, due to which it is also referred to in Estonian as rohegaas, or "green gas."

Other companies offering CNG at gas stations in Estonia include Eesti Gaas and Olerex.


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Editor: Aili Vahtla

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