Thread: Parity between petrol and LPG prices? Truth or rumour?

Originally Posted by bee utey

Autogas is propane plus butane and anything else the refinery feels will burn with it. So it is generally 1/2 the price of pure propane, which goes in consumer gas bottles. Gas bottle filling is mainly labour cost, and about 1/2 of the price is the bulk propane.

The primary price driver for propane is the Japanese market's winter heating and cooking, so it tends to be higher during our summer. Petrol tends to be higher priced during the northern hemisphere summer, ie our winter.

As for the rising LPG price overtaking petrol, I doubt it. Petrol costs will soon rise rapidly as the US and Asia throw off the problems from the GFC in '08

Just 2 hours ago I filled LPG at a mobil for 64.9 and standard unleaded was $1.50. I haven't seen such a price advantage for a couple of years. Will it last? Probably not.

As for the LPG excise, the LPG equipment wholesale industry is lobbying hard to defer the tax. So far they have gained 6 months stay and they aren't giving up just yet.

Sorry, this is another dated comment about pricing.

Spot prices for Butane is currently higher than propane, very unusual, but true ( thanks to China). Also, LPG ( autograde, propane etc) is made to standards nowadays.
The cost of a BBQ cylinder of gas is roughly-

Lpg 30%
labour to fill & cartage 20%
Cost factor to cover capital ( depot, cylinders, trucks etc) 10%
Profit 40% - some to bottler, some to retailer.

And there is strong talk the tax is all but beaten..

Originally Posted by F4Phantom

I am no expert whatsoever but it has crossed my mind that LPG needs to be roughly half the cost of petrol not 50c cheaper, if petrol goes to $2 and LPG is $1.50 then LPG is unaffordable.

I'm glad you're no expert because I'm scratching my head to work out the basis for your comment.

I run LPG on my 4.6 RRc and find that the difference between LPG and Petrol to be negligible in terms of economy (1lt/100Km difference) and hardly noticeable on power between the two, but I do have dual mapping in my ECU so each runs a correct profile. The cost of conversion is significantly compensated by the rebate.

So where do you calculate the difference needs to be 50% and not 25%?

But onto the topic, the Government would be unwise to bring LPG excise in line with petrol, if only for the fact that taxi fleets across the country would be switching back to petrol with it's concurrent environmental costs.

The above thread seems to be confusing LPG, CNG, and LNG. Just to clarify:-

LPG = those hydrocarbons that are liquid at normal temperatures and a modest increase in pressure, but are gaseous at nomal temperature and pressure. Mainly butane and propane. Some is produced along with oil and gas production, but a significant proportion is produced during refining of crude oil. Distributed as "Portagas" and automotive LPG. As indicated above much of the cost is in distribution. As an automotive fuel attracts less excise than petrol or diesel, although this may change. Production cost currently below that of petrol, but it should be realised that price depends on supply and demand, and if demand for automotive LPG grows to the extent that it becomes necessary to actually modify refinery operations to produce more, cost will rise to approximately the same as petrol.

LNG = methane the major constituent of natural gas (usually 99+%), cryogenically liquified and transported in bulk at temperatures below 90K (-182.5C). Costs can be very low provided that you can operate on a very large scale and have a rock-solid long term contract - the liquefaction plant has to be on a very large scale to bring the cost down, and hence is very capital intensive. Needs to have large reserves of gas that cannot be served by a pipeline due to distance from markets. Because of the immense capital investment by the purchaser in tankers, liquefaction plant, and storage at the other end, the actual cost of the gas must be very low, since the competition at the buyer's end is typically coal. Utterly impractical as a transport fuel, although boil-off losses are used as fuel in the tankers - but cryogenic storage is very expensive and the stuff is dangerous to handle.

CNG = compressed natural gas, i.e. methane. This is a viable transport fuel in some respects, as many areas have pipelines reticulating natural gas. The only problem is that to use it it needs to be compressed to around 4000psi to get the storage down to a reasonable volume, and even then, the volume is around four times that of liquid fuels such as petrol, diesel and LPG. Because of the pressure, the tanks are expensive and heavy compared to those for liquid fuels. Currently it does not attract excise, but even so is only financially viable if used on a fleetwide scale (to spread the compressor costs), and suffers from the drawback that you need to have your own compressor. The lack of excise and the pipeline distribution makes the raw material cheap compared to other transport fuels, but the cost of compressing it and providing high pressure tanks tends to take the gloss off. And it will be interesting to see if the excise stays off if it does become more popular!

John