Rising petrol prices and better technology have triggered an "educated rush" in Brisbane to switch cars to gas fuel with experts now predicting the number of gas-powered cars will double over the next decade.

The pressure on US oil caused by 2005 Cyclone Katrina renewed interest in LPG (autogas) as an alternative fuel, which was ignited again by the Federal Government's decision in 2006 to introduce a $2000 rebate.

Now, rising oil prices have pushed LPG (autogas) back into the spotlight.

LPG Australia predicts the 650,000 cars that have switched to gas - or have been bought to run on gas - will jump to 1.5 million over the next 10 years.

Brisbane-based LPG conversion firm, Carb and Gas in Woolloongabba, says rising oil prices are the latest catalyst to a burgeoning replacement fuel industry.

Owner Scott Hasted said smart thinking was the biggest change behind Queenslanders' decisions to switch from petrol to LPG (autogas).

"What has changed, to put it in blunt terms, is the average IQ of the person fitting their car to gas has gone up dramatically," Mr Hasted said.

"Environment, dollars and cents - and the fact that LPG has been regarded as a taxi fuel forever. What has happened in a very short space of time is the technology of the systems has leapfrogged incredibly."

Autogas produces 90 percent of the carbon dioxide of traditional petrol, making it a 10 per cent cleaner fuel source. A conversion costs between $3000 and $4500 depending on the engine type.

But Mr Hasted said new fuel injection technology now gave gas-powered vehicles similar performance to petrol-powered engines.

"Now you convert it, you drive it, you can't tell the difference between each fuel, so the technology is absolutely proven," he said.

"In the last two years on a bad week we might do one or two conversions," he said.

"And at the moment we'do 30 conversions a week, if we could," Mr Hasted said.

"But we can't physically do it."

Mr Hasted says his firm has 65 cars waiting to be converted from petrol to LPG (or autogas) because petrol prices were so high.

"If you include fleet vehicles, we have in excess of 100 jobs booked in."

Queensland has 9.1 per cent of Australia's gas-powered vehicles, with most in Victoria (44 per cent), New South Wales (20 per cent), South Australia (14 per cent) and Western Australia (11 per cent), followed by Tasmania (0.8 per cent) and the Northern Territory (0.22 per cent).

LPG Australia chief executive officer Steve Woodward agreed that new technology and rising fuel prices were the critical factors for people to convert to autogas.

"Since the Federal Governnment rebate started, we have gone from 50,000 conversions a year to 125,000," Mr Woodward said, based on figures to June 2007.

He said only racing drivers would notice the difference in performance.

"If you're going to race two cars down the main straight at Bathurst, you will notice the difference," he said.

"But if you are going to be doing normal driving, nowadays you are not going to notice the difference."

Just over 650,000 vehicles have "switched" from petrol to autogas since August 2006, representing about 5.5 per cent of Australia's vehicle fleet.

"We expect that figure to more than double to around 1.5 million cars by 2018 if the price relativity stays around where it is today," he said.

Mr Woodward said the conversion rate "per capita" showed how much growth was possible in Queensland.

In South Australia, 4.8 people per thousand switch across to autogas, with Victoria at 4.7 per thousand.

"In Queensland, it is 1.2 conversions per thousand and in New South Wales it is 1.5 conversions per thousand," he said.

"Now, there is no really good reason why the conversion rate to LPG should be four times in South Australia, than it is in Queensland and New South Wales."

Ford Australia - one of three major car makers who build cars with their own factory-fitted gas systems - said 13 per cent of their sedans in 2007 were gas-powered.

That proportion jumps to 41 per cent for their station wagons and to 37 per cent for their utes.

 

Converting your car to gas is a decision that could save you thousands of dollars on your fuel bill each year, a conversion company said yesterday.

However motorists must evaluate how long they will keep their car and how many kilometres they drive each year before making the decision to switch from petrol to gas, the RACQ says.

Woolloongabba-based firm, Carb and Gas, said a standard conversion kit for a modern sedan started at $3000 to $3500 and could reach $4500 for a four-wheel drive Toyota Prado or Landcruiser.

The Federal Government provides a $2000 rebate for people who switch across their private vehicle.

The gas cylinder sits either under the rear of the vehicle or in the boot between the two wheel arches. In some cases the spare wheel is relocated and sits upright against one wall of the boot.

Carb and Gas owner Scott Hasted said the cost of conversion could be recouped in about 18 months.

He said a motorist paying $100 a week on petrol would pay out around $5200 a year in petrol, or around $2600 using LPG.

"So you will save $2600 a year and if the average cost of a late-model conversion is $4500, you will pay for your conversion in a little over 12 months," he said.

He said the demand from people to shift across from petrol to LPG had skyrocketed in the past month.

"The point is that the price of gas, doesn't drive it, it's the price of petrol that drives it," Mr Hasted said.

"The price of gas could come down 10 cents (a litre) and no-one sees it. The price of petrol goes up 10 cents a litre, everyone sees it.

"Therefore we're driven by the price of petrol.

"The moment that petrol makes its move, we just go silly, absolutely out of control."

Unleaded petrol in Brisbane ranged in price from 148.9 cents to 151.7 cents per litre, while LPG was priced at between 61.5 cents to 67.9 cents per litre.

Mr Hasted said the rising oil prices were the third time in three years that people had decided LPG was a future fuel.

"It started with Cyclone Katrina (August 2005), that had a huge push-up. Then they announced the $2000 rebate (August 2006) and there was another huge push-up," he said.

"Then things levelled out.

"And then with this latest price hike, with the price of oil going up internationally, it has just been insane."

There is currently no excise duty on LPG fuel.

However, the Federal Government plans to introduce it in a series of 2.5 cents a litre jumps from 2011, to reach a level of 12.5 cents a litre by 2015.

LPG Australia CEO Steve Woodward said the price would still make gas competitive in the long term.

"It is going to be 12.5 cents a litre compared with 38.1 cents a litre," he said.

"So there is still going to be a huge price variation."

The RACQ warns motorists to check the warranty provided with the conversion kit to see:

If it affects the vehicle's warranty;

The impact on the vehicle's boot space, and;

Judge the cost of the conversion against how long the vehicle will be kept and driven.

 

As petrol prices continue to rise, we're all looking for alternative ways to save money and one way is converting your car to run on LP gas. But while it IS a good time to make the switch, Kate Donnison reports, we could be in for a long wait.

Scott Hasted has never been so busy. As owner of Carb & Gas at Woolloongabba, his days are spent converting cars to LPG.

Problem is, unprecedented demand means he's spending more time on the phone and less time in the workshop - reason being, the entire country is waiting on tanks.

"At present there are 2,000 tanks on back order through our suppliers in Melbourne," explained Scott.

Fuelled by soaring petrol prices, that demand looks set to continue as motorists are being warned to brace themselves for further rises.

"Once upon a time it would have been predominantly the taxi industry and high-k's commercial drivers. It's now probably 80% mums and dads who simply, um, have chosen an alternate fuel purely based on price."

An average-sized car costs around $2,500 to convert. Bigger cars, like 4-wheel drives, can set you back more than $3,000. It may well be money well spent when you consider LPG is priced at approximately 43 cents a litre, which makes it a third of the price of petrol.

"We worked it out between 9 and 12 months we'd probably make our money back on LPG," said father of two Roscoe Crouch.

Roscoe is one motorist who's prepared to wait as long as it takes.

"We rang up less than a week ago, spent a whole day on the phone to every company available. Um, some of them hung up on us, said, "Sorry, no more bookings."," recalled Roscoe.

Thankfully, Roscoe got on the waiting list at Carb & Gas, but now he's faced with, at best, a 4-week delay.

"Well, I'm on a disability pension, can't work a lot of hours, but I've had to go back to work to be able to pay for fuel."

After buying a '96 model Falcon earlier this year, keeping it on the road has become quite an expensive exercise.

"I'm spending about $160 a fortnight. It's a lot of money. Yeah, it is, and my wife's not real happy with it either."

Stressed Scott, "I've been told that between two and three weeks will be the earliest that we'll see cylinders and at this point we've probably got six conversions booked a week."

You'll find similar delays with suppliers across the south-east, so the best advice is to try and put your name down on a waiting list and leave a deposit.

More than 500,000 vehicles in Australia are hooked up to LPG and that number is expected to double by 2010. So for those motorists who have already made the switch, soaring petrol prices are a laughing matter.

While the rest of us feel the pinch, happy converts like Stirling Arthur can hardly believe their luck.

"I've had probably my last three cars converted to LPG and I've never looked back," said Stirling.

While the initial outlay was considerable, according to Stirling, the long-term benefits far outweigh the cost.

"For the price of getting the kit put in your vehicle, you can save the money fairly quickly, especially if you do a few kilometres. And especially the way fuel prices are going now, it makes even more sense than it used to."

And with no sign of a drop in fuel prices, there's never been a better time to make the switch. All you'll need is a little patience and you'll be saving money in no time.

If you are interested in converting your car to lpg, you can join the 6 week waiting list at Carb and Gas. You'll find similar waits industry wide, please call their office on 3891 5886.

BY THE TIME this issue of Australian Automotive Workshop reaches the national industry, the future of the LPG conversion subsidy will have been decided and announced by the Federal Treasurer, Mr Wayne Swan, as part of his May Budget.

Certainly, rumours emanating from the Expenditure Review Committee that the rebate of $2000, paid to motorists who convert their family cars to run on LPG, is to be axed in the forthcoming Federal Budget, have been running rife. 

One of the many industry bodies conducting a watching brief leading into the Budget is Australia Liquefied Petroleum Gas Association Limited (ALPGA). Phil Westlake, Industry Development Manager, said, “The LPG Vehicle Scheme has been a highly successful Government program that has assisted more than 116,000 motorists switch to more affordable LPG, with savings of up to 40% on their weekly fuel bills.

“Information from the industry about the scheme recipients shows that they are typically families with children, living in outer metropolitan areas, on lower than average disposable incomes, and with mortgages.” 

In a Budget submission to Minister Tanner, VACC made its position clear of its support for the subsidy and is pulling no punches about its stance on LPG. 

“If the LPG subsidy is scrapped, then we will work like blazes for its reinstatement. At a time of record petrol prices, and galloping current account deficits caused in part by the escalating cost of fuel imports, encouraging more motorists into LPG is not only beneficial to families, but beneficial to the Australian economy and the environment. LPG makes perfect sense for Australia; we have plentiful supplies and a mature conversion industry,” VACC Executive Director, David Purchase, said.

Nationally, the retro-fit industry for LPG turns over $350 million per annum. All States have welcomed LPG, but none more so than Victoria which accounts for close to 50 percent of national consumption (see figure 1). 
Thousands of Australians are now employed in the industry, with the number of LPG convertors (registered LPG conversion businesses) in Victoria alone rising from 360 prior to introduction of the rebate (August 2006) to now number more than 600. The conversion business is booming. It also supports a booming industry of component suppliers, equipment manufacturers, and retail infrastructure.
“Since the subsidy was introduced, figures to April 13 2008 show that 118,489 grants have been paid. That is a national average of nearly 6000 conversions per month. But this momentum is in danger of being killed off. Cutting the subsidy now, especially with LPG excise being introduced in 2012, will be seen as a double whammy. 

“What incentive will there be for motorists to convert their vehicles to LPG?” Mr Purchase asked.

There are an estimated 3 million tonnes of LPG produced annually by Australia. Some is exported, but the bulk of production, 1.9 million tonnes, is used for auto LPG. 80 percent of Australia’s LPG supply is sourced from the four oil/gas fields on the North West Shelf, Cooper Basin (SA), Bass Strait and Surat Basin (QLD). Australia’s production of LPG is projected to grow to 5 million tonnes by 2020 with supply outstripping demand until at least 2030.

“Australia is virtually self-sufficient in LPG with huge national reserves. When you consider that our massive trade imbalance is being swelled by our dependence on imported petrol, to use locally produced LPG would greatly assist our balance of payments problems and reduce inflationary pressures,” Mr Purchase said.
Mr Westlake agrees. “Using more LPG in vehicles reduces Australia’s reliance on imported crude oil and petroleum products. LPG is cleaner for the environment and reduces air pollution. Surely, these are all good reasons for the Government to
continue the scheme, as originally intended, to 2014,” he said.

“The LPG Vehicle Scheme has been a highly successful Government program that has assisted more than 116,000 motorists switch to more affordable LPG, with savings of up to 40% on their weekly fuel bills.”

            Phil Westlake

Three years after committing to convert the majority of its fleet to LPG Autogas-powered vehicles, Repco Ltd says that after conversion costs, the move has reduced fuel costs by over $2 million or 30 per cent.

As a result, Repco says future decisions about vehicle purchase for its fleets will be based on the availability of manufacturer-approved LPG Autogas-powered models or retrofit kits.

“Our policy is to supply LPG Autogas vehicles provided the vehicle has manufacturer warranty support” said Repco’s National Fleet Manager, Andrew Wilson.

Repco already runs 714 LPG Autogas-powered Ford Falcons and Mitsubishi Magna sedans out of a fleet 1081.

All of the Falcons have the factory-fitted E-Gas system, while the Magnas were retrofitted with a factory-approved system. Repco says they’ve proven very driveable and very reliable.

The company is now investigating the feasibility of purchasing six-cylinder factory warranted LPG Autogas utilities to progressively replace its fleet of approximately 500 four-cylinder non-factory warranted LPG Autogas delivery utes.

Repco is currently in discussion with Holden and Impco for the supply of LPG Autogas-powered V6 Rodeo utilities with the latest Sequential Vapour Gas Injection system fitted.

“We initially had to overcome some negative perceptions among our staff about the reliability and driveability of Autogas vehicles, but this problem has all but been eliminated by purchasing factory-supported LPG vehicles,” Mr Wilson said.

Repco says that since it began adding LPG Autogas-powered cars to its fleet, total fleet running costs (excluding accident costs) have been reduced by eight per cent.

“Repco’s delivery utes travel considerable kilometres annually so the payback period for LPG conversion is usually by the end of the first year,” Mr Wilson said. LPG Australia estimates that if over the course of a year Autogas averaged $0.43 per litre, while unleaded petrol averaged $1.07 per litre, a Holden Rodeo utility travelling 40,000 kms a year on Autogas would save its owner $2862 a year or $55 a week.

“As any astute fleet manager will appreciate, larger numbers bring greater savings,” said LPG Australia’s Industry Development Manager, Phil Westlake.

Automotive parts supplier Repco has renewed its commitment to running the majority of its vehicle fleet on LPG Autogas after rejecting diesel as a financially viable alternative.

Repco has begun rolling out a fleet of 70 Mitsubishi Triton, single and dual cab utilities, all fitted with a state-of-the-art Impco BRC vapour injection system.

A further 90 Tritons will join the Repco fleet in the second half of the year, adding to more than 600 Autogas-powered utilities and 120 large LPG sedans already in operation.

The balance of the 1100-vehicle fleet is made up of smaller 4-cylinder sedans and hatches.

“When it came time to replace some of our utes we looked closely at various diesel-powered models but the economics were quite shattering,” said Repco’s national fleet manager Mike Moffat.

Mr Moffat based his cost analysis on an average 80-cents-per-litre differential between the price of Autogas and that of diesel. The current price differential is well over one dollar per litre.

“Even allowing for the cost of LPG conversion, over an average 45,000 kilometres per year a diesel-powered equivalent vehicle would cost an extra $2600,” he said.

“I think a lot of fleet managers are starting to realise that up against LPG, diesel is not even in the race,” he said.

The Impco LPG conversion kit for the 3.5-litre V6-engined Tritons is the same factory-endorsed system applied to the Mitsubishi 380 and does not void the factory warranty.

Impco’s general manager John Coggins says the kit uses the latest vapour injection technology from the company’s BRC factory in Italy, providing optimum engine performance and driveability.

“With the Sequent 56 system, running the Tritons on Autogas is virtually indistinguishable from running them on petrol,” Mr Coggins said.

Mike Moffat is enthusiastic about the latest generation of LPG vapour injection technology.

“I wasn’t a fan of the old-style fumigation-style gas systems, but this system is a different world.”

Mr Moffat says Repco uses its Autogas-powered utilities for the delivery of major engine components and other drivetrain parts throughout Australia.

“We simply couldn’t afford to run our delivery vehicles if we weren’t using LPG – it would change the dynamics of our whole business.”