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LPG price rise warning
Article from: The Advertiser
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STUART INNES, MOTORING WRITER
November 16, 2007 06:30am
THE world price of butane and propane has increased 20 per cent in the past three months, bumping up the price of LPG at the pump.
The RAA warns if the retail price of LPG continues to rise, motorists will have to re-examine the economies of using LPG over petrol.
Early yesterday in Adelaide, the average price of LPG was 61 cents a litre, nearly half the price of unleaded petrol, at $1.26 a litre.
RAA fuel price analyst Matthew Hanton said yesterday LPG prices were tied to the world commodity prices for its main elements, butane and propane.
Propane was $670 a tonne and butane $700 a tonne in August. However, the November prices were $810 and $840 respectively.
Website motormouth.com.au reports that on October 15 LPG was 58.4c, on September 15 it was 54c and on August 15, 53.4c.
Mr Hanton says commodity prices are up as a result of supply and demand in the northern hemisphere, where winter is about to begin.
Diesel fuel was in short supply and increasing in price, and people in the northern hemisphere were turning to alternative fuels, such as LPG, he said.
Mr Hanton said the LPG price rises were "legitimate" and there was no sign of profiteering.
"At current prices the difference (between LPG and petrol) makes it feasible," he said of the economies of an LPG car.
"But once it gets to more than half the price of unleaded, people will have to start examining it and how much they are driving."
LPG vehicles use about 30 per cent more litres than when running on unleaded petrol.
It means, for example, a car averaging 12 litres per 100km of unleaded petrol, doing 15,000km a year, would use 1800 litres of petrol. At $1.20 a litre this would cost $2160.
The same car running on LPG would use about 15.6 litres per 100km, which for 15,000km in one year means 2340 litres. If the cost was 70 cents a litre, the total would be $1638.
The almost $500 saving would have to be divided into the cost of the conversion to LPG or the extra cost of buying an LPG car over a petrol car.
At current LPG and petrol prices, it is still advantageous to run on LPG – but prices are increasing faster than petrol. |
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