The Facts

Why does this seem so expensive?

Am I paying too much?

Has the cost of an LPG conversion gone up since the introduction of the federal government’s LPG Vehicle Scheme?

Since 2004 there have been three changes to the EPA exhaust emission limits. These limits have been revised downward to help air pollution, global warming and the environment.

To help achieve lower emissions resources have been put into alternate fuel technology, including LPG. In the main, this relies on an emphasis on sequential gas (LPG) systems.

Increased product costs of these improved LPG systems has led to an increase in the price of LPG conversions. To combat this, the federal government introduced the LPG Vehicle Scheme in August 2006, providing rebates on LPG conversions and new vehicles fitted with LPG systems.

This means that the current generation of state-of-the-art LPG systems and conversions are now cheaper than the previous generation of conversions performed prior to 2004. Now that the price gap between regular petrol and LPG has widened, the return on your investment is both larger and quicker.

When choosing where to purchase your LPG conversion, remember that it is not simply a retail product where you may be able to match a like product from store to store. When having an LPG conversion, there are three important things to consider:

The type of system you choose and how this effects its price;
The model and price of the gas cylinder;
The labour costs associated with having the system fitted.

At Frankston Gas Conversions and Automotive Services, we pride ourselves on supplying and fitting only the best tried-and-tested LPG systems, and the quality of our work is second to none. We carry out no local advertising, as we believe that word-of-mouth referrals are the most effective way to build a business; yet our extensive customer database shows that our work is superior and our customer service is second to none. So contact us today and find out the Frankston Gas Conversions difference.

Some fuel price comparisons

2005

Petrol retail price: $0.95/L

LPG retail price: $0.55/L (usage of LPG is 20% higher than regular petrol)

Comparable cost per litre: $0.66

If you weekly petrol bill is $100, your comparable weekly LPG bill would be $70. That’s a weekly fuel saving of $30, and a yearly fuel saving of $1,560.

2009

Petrol retail price: $1.35/L

LPG retail price: $0.50 (usage of LPG is %20 higher than regular petrol)

Comparable cost per litre: $0.60

If your weekly petrol bill is $100, your comparable weekly LPG bill would be $45. That’s a weekly fuel saving of $55, and a yearly fuel saving of $2,860.

Prices based on yearly averages which may be subject to periodical change.

Industry Facts

Petroleum Gas (LPG) is the generic name for mixtures of hydrocarbons (mainly propane and butane). When these mixtures are lightly compressed (approx. 800 kPa or 120 psi), they change from a gaseous state to a liquid. LPG is colourless, odourless and heavier than air. A sulphur based chemical (ethyl mercaptan) is added to give it a smell like rotten cabbage, so that even a very small leak can be easily detected.LPG burns readily in air and has energy content similar to petrol, which makes it an excellent fuel for heating, cooking and for automotive use.

The LPG industry began in Australia in the early 1920s with product imported in cylinders from the US.Australian production began at the oil refineries in the 1950s, although it was largely classified as a waste product. Seeing the hidden potential to make money out of the unused product, a number of companies started to market LPG for cooking and heating. By the 1970s, propane and butane became available in substantial quantities when Exxon Mobil (then Esso) and BHP opened the Bass Strait Oil and Gas Fields. Although developed for oil and natural gas, it produced LPG in quantities far greater than the demand. The surplus LPG was exported.

Australia’s overall demand has been increasing as more taxis and fleet vehicles adopt the cheaper alternative fuel. During the 1980s and 1990s, further naturally occurring fields were developed in Central Australia and the North West Shelf. The oil refineries also gradually increased their output and are continuing to do so. LPG occurs naturally in crude oil and natural gas production fields and is also produced in the oil refining process. Australia has five sources of naturally occurring LPG – Bass Strait (1,050) kilotonnes (kt)), Cooper Basin in Central Australia (410 kt), North West Shelf (810 kt) Kwinana in Western Australia (330 kt) and Surat Basin in Queensland (16 kt). Refinery production is from seven refineries, Bulwer Island (BP) and Lytton (Caltex) in Queensland, Clyde (Shell) and Kurnell (Caltex) in New South Wales, Altona (Exxon Mobil) and Geelong (Shell) in Melbourne and Kwinana (BP) in Western Australia producing 670 kt.

Australia produces currently about 3,300 kt of LPG annually. Of these volumes, 80% is naturally occurring (i.e. extracted from oil and gas production) and 20% is extracted from crude oil in the refining process. Australia’s production of LPG is projected to grow to 5,024 kt by 2020. Australia currently consumes about 1,907 kt of LPG each year. We use around 47% of all production and export the remaining 53% (predominantly butane) which is surplus to our requirements. The automotive industry uses nearly 65% of the total Australian consumption.

Other uses include, recreational (barbecues, caravans, camping stoves, marine), residential (heating and cooking) and commercial/industrial (as a fuel). More than 500,000 Australian motorists run their vehicles on LPG. The traditional market has more than 1 million customers and there are approximately 7 million barbecue and camping cylinders in circulation in Australia. With easy access to ample local supplies, Victorians are the largest consumers of LPG accounting for 44% of total national consumption. (See also in Publications: Liquefied Petroleum Gas Supply & Demand Study 2001 and ALPGA Information Paper 1 – Supply Research Study 2000 – 2020).

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