Petroleum Gas: Is LPG Going To Help Australian Drivers?
By Motoring Channel Staff - 16/Aug/2006
Conversions have risen sharply,
and are expected to rise even
the Governments new LPG rebate scheme
Australia's industry development manager
Phil Westlake fills
up his autogas sports car in NSW
Lower Fuel Costs?
Australian Federal Government has essentially thrown more than a
billion dollars at Australian drivers who sign up for LPG, and it's not
a bad idea. Australia exports a lot of LPG every year, and it is better
for the environment than petrol. I once had a 1979 XC Ford Falcon that
ran on gas, and it was cheap to run and only lost a bit of power, but
one of the problems I found was that it ran much hotter than petrol and
eventually cooked the cylinder head.
LPG systems are much more advanced and problems like this are virtually
a thing of past. But one area that I believe the Government has missed
out on is the practicality of two-wheeled vehicles. Motorised
two-wheelers are incredibly cheap to run and all types of two-wheeled
transport help to reduce traffic congestion. Here's my question to the
Government: where are the subsidies for scooters, motorcycles and
What I often wonder is why does a human
need a 2.2 tonne 4x4 to shift just one body to work at great
expense, when a 165kg motorbike or even a 20kg push bike can perform
the same function? Food for thought.
- Feann Torr, Editor
Federal Government has for some time been accused of not doing enough
to ease the burden of rising petrol prices on drivers, and has
responded to such criticism with a new LPG subsidy scheme.
Simply put, if
you buy a new LPG-fueled car from the dealership, such as an
LPG Ford Falcon or Mitsubishi 380, you'll be entitled to a
$1,000 tax-free grant. Furthermore, owners of petrol cars that convert
their vehicles over to LPG, or liquefied petroleum gas, will get a
grant of $2,000, also tax free.
began on August 14th, 2006, and will run for eight years.
Government released details of its $1.5 billion dollar fuel package on
Monday, which as well as providing incentives to drivers to convert to
LPG, also encourages the use of ethanol-blended fuels by petrol
stations by offering cash incentives, and includes $76 million
for new oil exploration and puts $123 million on the table to fund
renewable power sources in remote parts of the country.
to this new government initiative has been mixed. Though cheaper than
petrol and more environmentally friendly (producing about 15
less greenhouse gas emissions and just one-fifth the air toxic
emissions compared to petrol) the Australian Labor Party has
been cautious about applauding the new scheme, saying that many drivers
will have to travel for thousands of kilometres before LPG begins to
save them money, and only those with large disposable incomes will be
able to afford the initial $2,500-$3,000 conversion or new LPG cars.
radio has been buzzing with arguments for and against, and one of the
'against' is that those drivers with older and cheaper cars
could not make sense of the equation: why splash out $3,000 for a
conversion when your vehicle is worth $1,500, and despite the $2,000
rebate? It has been reported that car lover and talkback radio
host John Laws is not happy with the plan, labelling it discriminatory.
the FCAI (Federal Chamber of Automotive Industries) has
Federal Government's announcement of an LPG Autogas conversion subsidy.
"The subsidy is a useful initiative," FCAI chief executive Peter
"It will help many families overcome the impact of recent high fuel
prices. It will give many motorists an added choice by bringing forward
the breakeven point which makes LPG fuel systems financially viable."
Mr Sturrock also mentioned that the new rebate scheme would
help to stabilise demand for vehicles in
market segments which had been hardest hit by increased fuel prices
(read: large cars, such as Commodore and Falcon).
"LPG's cost at the pump means daily running costs are virtually
halved," Mr Sturrock added. "It gives buyers another option to
While the public reaction to the scheme
appears to be mixed, it seems that the FCAI and carmakers
are happy with the new scheme. "A new dedicated LPG Ford
Falcon, with the grant,
represents an outstanding offer for Australian families," said
Ford Australia's president, Tom Gorman.
clearly happy with the move, as the Falcon - it's large family sedan -
only Australian built car to offer a dedicated LPG system, essentially
wiping $1,000 off the new car price due to the new LPG subsidy scheme.
Ford sales of dedicated LPG Falcons have surged in the last two and
half years, from 6% of annual Falcon sales in 2004, to 11% in 2005 and
almost doubling for the third year in a row, reaching about 21% of all
Falcon sales thus far in 2006.
"At current fuel
prices, motorists can expect to save approximately $40 per tank with an
LPG vehicle versus an equivalent petrol model," said Mr Gorman.
surprisingly, LPG Australia has also welcomed the move. "The
government subsidies for new LPG vehicles and conversions are a
sensible response to current petrol price trends because they recognise
that LPG Autogas is a readily available alternative fuel," said LPG
Australia's industry development manager Phil Westlake. He added that
the Federal Government's $2,000 LPG conversion subsidy meant that
motorists using about $80 worth of petrol per week would
pay back the average $2,500 cost of conversion in less than four months.
the LPG Australia has also formed a new Autogas Task Force (ATF) in
direct response the expect spike in LPG conversions. "With the
Government's announcement, an autogas conversion has become
an investment in the future for consumers, and the LPG industry will
invest in the future as well," said ATF spokesperson, Ian Maloney.
"While the spike in demand may involve some short-term conversion
capacity issues, this will not adversely impact on the savings the
motorist makes, which will continue for many years to come. The
government has given the LPG industry long-term certainty and we
will respond with greater installation capacity and a wider range of
autogas kit availability," concluded the ATF's Ian Maloney.
mixed reaction towards the new subsidy scheme has not fallen on deaf
ears, and talking to South Cross Broadcasting, the Prime Minister of
Australia, John Howard, conceded that this new scheme is not a complete
solution to rising fuel costs, but will provide some relief to some
drivers. "There's no easy solution to this problem and I
don't hold out the LPG subsidy as being a silver bullet, as being
the answer to high petrol prices.
"It's doing something at the margins to help, I suspect, a
reasonably large number of people," said the Prime Minister. "The
best way of helping people in relation to high petrol
prices, generally, is to put more money in their pockets through
things like tax cuts."
While most motoring
groups have welcomed the package as well, the Opposition
Government is skeptical about the $1.5 billion package, with Labor
leader Kim Beazley arguing that the Howard Government isn't doing
enough: "Over the next eight years the Commonwealth will take in
associated with the fuel excise of over $100 billion, and
big-hearted Arthur opposite, the Prime Minister of Australia, will
return to the Australian people in one way or another perhaps $1
While the LPG scheme will be a
welcomed by many, and can reduce fuel costs considerably,
there are other issues to consider including the infrastructure - or
lack of - to cope with converting the expected surge in demand for LPG.
Martin Ferguson, the Labor party's spokesman for resources, had this to
say: "The Prime Minister has to face up to the fact that it is not
just the availability of LPG in rural and regional areas that is a
problem — it is the availability of workshops and skilled
people that can do conversions."
Many LPG conversion shops had
already experienced a boom in people wanting the conversion for their
cars, and before the rebate scheme begins on October the 1st, many shop
were already reporting backlogs until late into the year.
are many arguments for and some against the new initiative by the
Government, who is well aware that rising petrol prices will be one of
the key election issues at the late 2007 (or possibly early 2008)
you be getting LPG now there's a rebate? Can you afford the
initial outlay, and what do you think of the plan? Is it discriminatory
as some are arguing, or is the Australian Government doing all it can
to ease the burden of rising fuel prices?
Tell us your thoughts on the issue and we'll print
them in the letters section.