Ignoring the silly uneducated Greeny fool and back to the topic which is far too hard for the Greeny drongo to understand.The story behind the rise and fall of LPGLPG pump at the bowser
Amidst the fuss about petrol price movements, sustained growth in the popularity of diesel and the looming rise of electric vehicles, Liquid Petroleum Gas (LPG) has become the forgotten sibling of the local fuel industry.Total LPG sales in NSW were 4.4 per cent of total fuel sales during the previous financial year and this figure has been slowly falling over time.
This state of events has caused distress to some of our Members, who’ve written to us via social media to complain of price gouging and reduced availability of what was once a hero propellant.
“The fuel search function on the my nrma app continues to show that LPG is available at both the Ulladulla and Batemans Bay Coles Express facilities when this has clearly not been the case for the past several weeks,” Christopher J wrote.
“Following our recent trip to the Tamworth Music Festival, this situation appears to be almost across the board for Coles Express.
“Given that we have converted our vehicle to LPG for the cost saving and the environmental benefits, this is a very real concern when we are planning to do some serious caravan travel throughout Australia in the near future.”
Mark C complains that Shell and BP are also removing LPG bowsers, with serious ramifications for consumers.
“People took advantage of government inducements, only to be left with no competition on price rises like petrol users,” he wrote.
The state of playThe NSW Government is unable to check every servo in the state and motorists are urged to contact the Department of Fair Trading if prices are still listed for locations where LPG or any other fuel is no longer sold.
And while we are not yet aware of Shell or BP’s policy, we can confirm that Coles Express has decided to withdraw LPG bowsers on a location-by-location basis.
This means an estimated 24 out of 354 sites in Sydney will no longer sell LPG, while 711 servos across the state still stock the fuel.
But the reasoning behind the Coles Express decision – falling sales for a fuel that is expensive to distribute, stock and dispense – signals a sad decline for what was once seen as the saviour of Australian road transportation.
Origins of the energyLPG was identified as an important component of petrol way back in 1910 but didn’t emerge as a retail option until the global oil crisis of 1973.
Australia has a self-sufficient abundance of LPG but for too many reasons to even summarise here, we are both an importer and exporter with our price strongly influenced by the Saudi Contract Price (SCP) since deregulation in 1991 in much the same way that oil prices follow the Brent Crude trend.
The sales pitchEven so, LPG remained an eye-catchingly cheap fuel option up to the start of the 21st century as petrol prices surged, and its popularity exploded when the Howard Government introduced the LPG Incentive Scheme in 2006 that offered a $2000 subsidy for either new car purchase or retro-fitting.
The scheme was designed to promote sales of locally built LPG-powered Commodores and Falcons but it also resulted in six-month waiting lists at workshops equipped to convert petrol-powered vehicles with LPG kits and tanks, as the financial argument was so strong.
Ford has previously pointed out that an LPG Falcon that covered 15,000km per year consumed $1476 worth of fuel at an assumed rate of 80 cents per litre while the petrol-powered model cost $2228 when regular unleaded was priced at $1.50 per litre.
This represents an annual saving of $752 and the addition of the subsidy put the owner of the gas-powered vehicle ahead after a year, even when taking into account the $2500 higher purchase price of an LPG Falcon.
Back when average petrol prices first spiked above $1.40 in 2008 and then crested $1.60 in 2014, this was a compelling proposition.
Fast-forward to today and even with the recent rise in petrol costs, we aren’t aware of any outlets selling regular unleaded today for more than $1.45 per litre – whereas LPG prices outside of Sydney can easily average above 80 cents per litre.
Crunching the numbersBut that’s only one reason why LPG is fading as a fuel option.
The second reason was the introduction of an excise on LPG, starting at 2.5 cents per litre at the end of 2011 and rising to 13.1 cents per litre as of February 1, along with the general price rise in all fuels in the first decade of the 21st century.
This contributed to making the cost of LPG greater relative to the cost of petrol, even as the actual margin remained stable: in March 2004, the average price of LPG (45 cents per litre) was 44 per cent of the price of regular unleaded ($1.02) but by March 2014 the price of LPG (91 cents) was 60 per cent of regular unleaded ($1.52).
Read the rest of the demise of LPG herehttps://www.mynrma.com.au/membership/my-nrma-app/fuel-resources/the-story-behind...