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The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

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Developing the Market for Gas as a Motor Fuel: New Opportunities for Regions and Investors
14 February 2019
14:30—15:45
KEY CONCLUSIONS
Developing market for gas as a motor fuel being Russia’s objective

We intend to increase the amount (of gas as a motor fuel consumption — ed.) from 0.6 billion cubic metres of gas to 10.5 billion cubic metres in the next 15 years. We are talking about forming a new market, creating infrastructure, about investments inflow. Our estimations show that we can create an order for mechanical engineering enterprises till 2030 — the demand for equipment amounts to over 2 trillion roubles — Anton Inyutsyn, Deputy Minister of Energy of the Russian Federation.

Both producers and users of gas-engine equipment were provided with 20 billion roubles of support measures from 2014 to 2018. We provide a concessional auto loan system for individuals, while concessional leases are more suitable for business — Denis Pak, Director of the Department of the Automotive Industry and Railway Engineering, Ministry of Industry and Trade of Russian Federation.

Environment and ecology are the two pillars [the condition of] which we can improve by developing the market for gas as a motor fuel. The synergy effect produced by the effort of the government, regions and business will help accelerate [this process] — Irina Zhachkina, Member of the Board, First Deputy Chairman of the Board, Russian Agricultural Bank.

Consumers and manufacturers interested in gas engine equipment

Gas as a motor fuel is not the fuel of the future, its time has come. The equipment has proved to be viable, the infrastructure in the pilot regions is already well-developed, the consumers can already see the cost-effectiveness in practice. A freight truck allows an annual saving of 750 roubles — Evgeniy Pronin, Director for Gas Engineering Equipment, KAMAZ.

We are facing a big challenge — transferring the fleet to gas as a motor fuel — Sergey Khramagin, Chief Executive Officer, State Transport Leasing Company.

We produce gas-engine equivalents of all KAMAZ diesel-based vehicles, it is over 120 models — Evgeniy Pronin, Director for Gas Engineering Equipment, KAMAZ.

ISSUES
Limitations of infrastructure and legislation

Land is the main and most problematic issue when determining specific sites of these facilities. It is not only about the land, a high-pressure is required, high power consumption is assumed — Mikhail Tikhonov, Minister of industry of Rostov region.

Fire safety issues – availability of appropriate vehicles in the garage, in particular – <…> have not been settled, which is a limitation — Vladimir Solodov, Chairman of the Government of the Republic of Sakha (Yakutia).

State support measures being insufficient

The programme that we have established by investing state-budget money in the capital of State Transport Leasing Company allows us to buy equipment on good conditions. The programme is not big, however. We have invested in it, launched it, and now we only work with reinvestments. To make this programme applicable to the tasks in question, it should be extended — Sergey Khramagin, Chief Executive Officer, State Transport Leasing Company.

The parent company of our regional leasing company is the Corporation for Development of Small and Medium Business. They have limitations on funding transport. As soon as we solve this problem, we will be able to massively subsidize this type of leasing — Vladimir Solodov, Chairman of the Government of the Republic of Sakha (Yakutia).

SOLUTIONS
Complex state support for consumers and manufacturers of gas engine equipment

First, building infrastructure and partial compensation of costs. Second, retaining gas as a motor fuel prices within 50–60% of diesel fuel price. Creating an extensive and easy-to-use chain of filling stations. To make investments profitable, the Government has adopted measures providing investors with support amounting to 30% of capital expenses on one filling station. It is profitable to invest in equipment conversion — in order to support this process, the Ministry of Energy suggests that the Government provides funding for partial compensation of 30% of equipment unit cost — Anton Inyutsyn, Deputy Minister of Energy of the Russian Federation.

Some regions add (money to equipment conversion — Ed.) from their budgets, and it may amount to 50–60% — Anton Inyutsyn, Deputy Minister of Energy of the Russian Federation.

On the one hand, stimulating the demand for gas-engine equipment, and on the other hand, building the infrastructure and providing certain guarantees that the price difference between gas as a motor fuel and diesel fuel will remain the same, we will manage to increase consumption of gas as a motor fuel through our joint efforts — Denis Pak, Director of the Department of the Automotive Industry and Railway Engineering, Ministry of Industry and Trade of Russian Federation.

Reduced transport tax for private individuals will be <…> a good incentive for buying gas-engine cars — Irina Zhachkina, Member of the Board, First Deputy Chairman of the Board, Russian Agricultural Bank.

Retaining stable prices for gas as a motor fuel

If we speak about the economy of investors that will build compressor stations, today’s level of prices for gas as a motor fuel has remained (stable — Ed.) for already a long period of time. And we suggest that this level of gas prices should not change which will provide the investors with predictability and stability. Gazprom has taken on the mission of ‘breaking through’ the situation with gas-filling stations — Valery Golubev, Deputy Chairman of the Management Committee, Gazprom.

Implementing pilot projects in the regions

Gazprom wants to start a pilot project in Rostov Region, which will include 39 gas-filling facilities. Reaction of businesses is also quick — today there are around 30 applications (for building gas-filling facilities — Ed.) and entrepreneurs are willing to re-equip 11 filling stations. We have joint initiatives with Italian companies on developing business for manufacturing this equipment — Mikhail Tikhonov, Minister of industry of Rostov region.

The material was prepared by the Russian news agency TASS