Compressed natural gas costs jumped this week after the new year rang in with the expiration of a 50-cent-per-gallon federal tax credit.
Fuel costs as low as 88 cents a gallon are likely gone, but industry leaders say the momentum is not.
I bought my 2009 CNG Honda Civic in April, well after Congress included the tax credit in its fiscal cliff negotiations in late 2012.
I knew the credit was set to expire at year's end, but I also knew the CNG car would make sense financially for me even without the tax credit.
Oklahoma Energy and Environment Secretary Michael Teague said that is likely to be the case for most people who have made the switch to CNG.
“I think you're still going to have enough difference in what you're paying for gasoline and what you're paying for CNG to still make that very affordable and enticing,” he said.
With the increase, most CNG stations in the Oklahoma City area are set to charge between $1.40 and $2 per gasoline gallon equivalent, well less than Thursday's Oklahoma City average price of $3.05 per gallon for gasoline.
Except for the tax credit change, compressed natural gas prices also tend to be much more stable than gasoline.
A $1 increase in the price of 1,000 cubic feet of natural gas translates into a hike of about 12.5 cents for the cost of an equivalent gallon of CNG.
Still, this week's price jump will eat into the profits and slow the return of those who have spent thousands of dollars to covert their vehicles to run on natural gas or paid higher prices for new CNG vehicles.
Much of the expense in buying or converting a vehicle to CNG is in the cost of the fuel tank. Drivers who have invested in multiple tanks to allow them to travel longer distances are likely to feel this week's price jump the most.
But even they likely will recover their costs long before the vehicles are retired, Teague said.
“The other benefit is the engine lasts longer because the fuel burns cleaner,” he said. “They're going to be able to keep their trucks twice as long.”