Bangladesh will switch all its public-sector vehicles to run on compressed natural gas (CNG) from petrol or diesel by the end of this year in a bid to cut surging energy import bills, its energy minister said, according to Reuters.

"We plan to convert all vehicles used by government and semi-government offices and agencies to run on CNG as early as the end of 2005," AKM Mosharraf Hossain, State Minister for Energy and Mineral Resources, told the news agency.

This would substantially cut fuel import costs, which could nearly double to $US1.3 billion a year if oil prices in the international market continue to hover around $50 a barrel, energy officials reportedly said.

Mosharraf told Reuters the government had saved about 2.5 billion taka ($39.3 million) in the past year by converting about 50% of public sector transport to CNG, which had the added advantage of reducing air pollution.

Reuters noted that Bangladesh, an impoverished country of 140 million people, has no significant oil resources but produces about 1.2 billion cubic feet (bcf) of natural gas per day from fields in the east and offshore, equivalent to over a third of the volume consumed by South Korea.