Yesterday's Cabinet decision granting a temporary waiver of the excise tax on the installation of natural-gas-powered engines will encourage more transport operators and motorists - who have found themselves hit by the most dramatic rise in fuel prices in years - to make the switch. Greater use of natural gas is part of the government's energy-conservation programme designed to trim the country's oil consumption. The move will also provide major carmakers with incentives to offer models that use conventional (petrol or diesel) fuel but can also serve as a natural-gas vehicle (NGV).

The incentive slashes the tax on natural-gas engines from 30 per cent to 22 per cent, or up to Bt50,000 per engine, for a period of two and a half years. Carmakers like Mercedes-Benz, Toyota and General Motors have already expressed interest in modifying their assembly lines to produce vehicles with dual-fuel system engines, or perhaps even fully fledged NGVs if and when there is demand for them.

The tax incentive is expected to put an additional 18,000 NGVs on Thailand's roads each year. This would, in turn, help save some Bt760 million in oil imports annually.

In the initial stage, carmakers are expected to install and test third-party conversion kits, to enable their engines to use natural gas. The tax incentives cover the actual cost of installation and warranty for engines fitted with natural-gas conversion kits.

Transport operators and motorists will benefit from the lower initial investment cost of buying NGVs and the subsequent lower cost of fuel. Fuel costs for natural-gas vehicles are about one-third of those for vehicles that run on petrol.

The tax incentive is a more concrete measure than previous energy-conservation programmes, which were rather patchy and did not offer clear economic incentives to carmakers, transport operators or motorists.

At present, there are fewer than 100,000 NGVs in the Kingdom, partly because the public is still unsure about the quality of the conversion kits provided by non-carmakers, safety and long-term effects on vehicle engines, such as maintenance costs. Getting carmakers involved would increase public confidence.

Natural gas was first introduced for vehicles in Thailand in 1984, when a number of Bangkok buses and taxis were retro-fitted with conversion kits, enabling them to use natural gas in a pilot project. Then in 1993, the use of natural gas was widened when the Bangkok Mass Transit Authority started using natural-gas buses as one of several measures to combat the city's notorious air pollution.

PTT Plc, the main provider of natural gas in the market, plans to expand its NGV-station network from fewer than 100 now to 430 within three years. The number of stations will eventually reach 700, in order to keep pace with the expected rise in the number of NGVs.

The natural gas used in NGVs consists mostly of methane, which is colourless, odourless and lighter than air in its natural form. It offers complete and clean burning in engines, with lower levels of emissions than other fossil fuels and has an octane rating of 130.

As such, it is regarded as economical, safe and environmentally friendly. But its popularity as a fuel has been hampered by the initial investment cost of creating an extensive network of NGV stations to serve consumers over a wide geographical area.

Thailand has substantial reserves of natural gas underneath the Gulf of Thailand, but these are underused. Wider use of natural gas in all its forms throughout the country would greatly help cut oil imports.

The government will supplement these measures by aggressively promoting the use of gasohol (which is regular petrol plus alcohol) and biodiesel (or mono-alkyl esters, a diesel fuel made from natural, renewable sources like vegetable oil).

There are also government initiatives in the works to persuade industrial estates to convert their oil-burning power stations to ones fuelled by natural gas. These new measures also need rapid implementation to help the country meet its vital conservation targets.