Posted on December 26, 2013 at 10:33 am by Zain Shauk
HOUSTON — The price of compressed natural gas for cars and trucks will jump 30 percent at some stations because of a federal tax credit set to expire on Tuesday.
The incentive has offered a 50 cent tax credit on each gasoline gallon-equivalent of natural gas sold by fueling stations.
While most stations pocketed most or all of the incentive to help cover costs, others, such as the 19 stations run by natural gas producer Apache Corp, passed on the entire credit to consumers in the form of a discount on their fuel.
Apache’s Houston refueling station at the company’s Galleria area headquarters, for example, currently charges $1.67 for each gasoline gallon equivalent of natural gas. The next cheapest station in the Houston area charges $2.04.
Energy information agency / Henry Hub NG spot price today is $3.64 Million BTU or .51 cents per DGE. Add your .50 subsidy back into the cost price with .25 cost of compression and .10 for transportation for a toal cost price of $1.36 DGE without profit. Add .50 profit per DGE or GGE and the pump price is around $1.86 for a gallon of CNG vs. $3.95 gallon of diesel for a net difference of $2.09 per gallon advantage to CNG.