PRESIDENT Gloria Macapagal-Arroyo launched the first commercial bus using indigenous compressed natural gas (CNG) -- the government’s answer to the surging prices of oil.

The buses will be powered by CNG, which will be sold at 14.50 per liter for the next seven years, 50 percent lower than diesel, which is 29.50 per liter, according to Energy Secretary Raphael Lotilla.

The President, together with energy officials, members of the media; Canadian Ambassador Peter Sutherland; officials of Cummins Westport, the manufacturers of the CNG engines; and the Chinese delegation, Cummins' partners in manufacturing the CNG buses, took the inaugural ride to Luneta then back to Malacañang.

Lotilla said he expected the lower fuel cost to translate into lower bus fares. He added the use of this type of gas would also contribute to cleaner air. “With the fuel cost much lower, relative to diesel, we expect they will be passing on the benefit to the passengers through lower fares,” he said in a news briefing in Malacañang.

The gas will be available initially at the Shell station in Mamplasan, Biñan town, Laguna province.

At least 200 CNG buses will ply the Manila-Batangas route starting in August. In the coming days, CNG buses will also be seen in Metro Manila, Lotilla said.

Homer Mercado of HM Transport Inc., one of the six accredited importers and operators of CNG buses, said each bus costs about four million to six million pesos. He says he owns 80 CNG buses.