Compressed Natural Gas Prices Plummet

Because of tumbling commodity prices, federal tax credits, and other agreements, fuel for compressed natural gas (CNG)-fueled cars and trucks is well below $1 of gasoline equivalent per gallon at many fueling stations, CNG experts are quoted as saying on iStockAnalyst.

Motorists currently pay close to $3 per gallon for gasoline or diesel, and conventional gasoline hasn't been below $1 per gallon since the mid- to late 1990s. But Oklahoma Natural Gas fueling stations around Tulsa, Okla. sold CNG for about 75 cents per gallon of gasoline equivalent during the week of Jan. 10.

Mark Sprowls, who specializes in CNG vehicle sales at Joe Marina Honda in Tulsa, said the price drop was a reflection of low natural gas prices and a 50-cent-per-gallon federal tax credit. He believes the low prices will last a bit longer.

Although CNG vehicles are still rare, utilities, governments, and other entities have begun converting fleet vehicles to natural gas. The Honda Civic GX is perhaps the CNG market's most common dedicated-fuel small vehicle. Various shops and dealerships offer conversion kits for other makes and models.

GX sales have slowed some since the $4,000 federal tax credit for CNG vehicle purchases expired Dec. 31.

CNG proponents such as energy kingpin T. Boone Pickens are pushing for conversion of the nation's truck fleets and lowering dependence on imported oil.