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Forget petrol prices for a minute. What about gas?

By 7 March 2012 19

I drive a dual fuel petrol/gas vehicle.  Due to economy reasons, my preferred fuel is gas.  When I bought the vehicle around June last year, gas was 64.5 cents per litre, and it stayed steady at that price, seemingly immune from the constant fluctuations in the price of petrol.  I was aware that as of 1 January, there was to be a small increase, about two or three cents, due to a change in government tax arrangements or some such.  In about mid-January, the price jumped to around 75 cents.  A day later, at my local, the Woolies servo at the Jerra shops, it jumped again to around 80 cents, but pretty quickly went back to 75 cents. 

I took a trip to Melbourne over the weekend, and it was around 73 to 75 cents most places, though one servo on the Hume had it at close to 90 cents.  However, diverting into Wangaratta, I found it for 65 cents.  Great – filled the tank.  Monday morning, I filled up in Jerra at around 75 cents.  Monday afternoon at Jerra, it had climbed to 85 cents, and Tuesday afternoon to 90 cents.

Driving in this morning, servos along Canberra Avenue seemed to have it around the 74 cents.  I didn’t go past Jerra so don’t know if they’d dropped again.

The thing is – and thanks if you’re still with me – as a percentage increase, these jumps are very high.  If you go from 64.5 cents to 75 cents, that’s a 16% increase in price.  If you did that to petrol at say $1.40 a litre, that would have the price rising to $1.62 a litre.  If you look at the increase of Woolies at Jerra from 64.5 to 90 cents a litre that’s a 39% increase.  In less than two months, kids.

This is my first time running a vehicle on gas, so I’m not aware is this sort of increase is seasonal, or driven by something else.  FSM forbid that I should think Woolies Jerra is price gouging!  I’m very interested to hear any insights Rioters have on this, and also, if there is any avenues of investigation – that is, is it the sort of matter that the ACCC would look at?  I do know that I lose all economic benefit of running my vehicle on gas if the price is 90 cents a litre and may as well revert to petrol, which would be a shame.

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19 Responses to
Forget petrol prices for a minute. What about gas?
Jivrashia 1:51 pm
07 Mar 12
#1

Petroleum companies have now applied price gouging to LPG…
Oh, sorry, should I say PRICE CYCLE.? Meh, same thing.

Thanks for the heads up MsCheeky.

arescarti42 2:34 pm
07 Mar 12
#2

I noticed it too.

I maintain a spreadsheet of fuel prices and the efficiency of my car, and according to it, late last year LPG was running about 65-70c a litre. I filled up at the airport a few days ago and it was about 85c/L.

LPG is a globally traded commodity and isn’t used for exactly the same things as oil, so it is understandable that price fluctuations for it would differ somewhat to that of oil.

As for whether you should still be running on LPG, there is probably still a cost advantage at 90c/L.

My car for example (1.5 tonnes of shitty old falcon) gets about 15l/100km on LPG (according to my spreadsheet). I suspect it gets about 11/100km on unleaded (I’ve never run it on unleaded long enough to work it out). At a price of say $1.45 for unleaded, it would mean that LPG would have to be more than $1.06c/L before it’d be cheaper to start buying petrol. More generally, the ratio of LPG to ULP needs to be greater than about 0.73 for petrol to be less costly for me than LPG.

Watson 2:42 pm
07 Mar 12
#3

I swear it was the dog!

Holden Caulfield 2:43 pm
07 Mar 12
#4

arescarti42 said :

…I maintain a spreadsheet of fuel prices and the efficiency of my car…

Awesome. I’m having a dinner party this weekend, would you like to … oh, no, that’s okay. Never mind. Forget I said anything.

shirty_bear 2:56 pm
07 Mar 12
#5

Likewise.

It does appear that the bastard oil companies have taken advantage of the mandated price hike (excise creep, I believe) to add varying amounts for themselves. As the OP says, there also seems to be much greater variance than there used to be. Mid-70′s seems to be generally available now, which is a big %age climb on the mid-60′s of a year ago.

Prices out of town are a crapshoot though; I drove back from Qld several months back, and was shocked by LPG prices up Moree way. Sane again by Dubbo.

As for action being taken … pffffft. How long have they been colluding on petrol for? LPG is small beans in the market.

Peewee Slasher 3:13 pm
07 Mar 12
#6

http://lpgaustralia.com.au/site/media_centre.php?task=detail&id=0062

“700,000 motorists will soon pay more at the bowser for the greener LPG fuel and hundreds of others may be deterred from converting their vehicles to LPG after the Senate last night passed the Government’s proposed Excise on Alternative Fuels Bills.”

Blame the guvmint

VYBerlinaV8_is_back 3:36 pm
07 Mar 12
#7

Holden Caulfield said :

arescarti42 said :

…I maintain a spreadsheet of fuel prices and the efficiency of my car…

Awesome. I’m having a dinner party this weekend, would you like to … oh, no, that’s okay. Never mind. Forget I said anything.

LOL!

Thoroughly Smashed 3:46 pm
07 Mar 12
#8

I haven’t been paying attention to LPG prices, so it was funny to see it at almost a dollar on the south coast last weekend. Especially so considering their unleaded was cheaper than the prices I saw in Canberra both before and after.

bd84 5:26 pm
07 Mar 12
#9

It’s been fairly well publicised that the price of LPG has risen by about 12c/L across Australia in the past few weeks. Put down to rising commodity prices resulting from the “middle east tension”. How true that is would be anyone’s guess.

arescarti42 6:00 pm
07 Mar 12
#10

Holden Caulfield said :

arescarti42 said :

…I maintain a spreadsheet of fuel prices and the efficiency of my car…

Awesome. I’m having a dinner party this weekend, would you like to … oh, no, that’s okay. Never mind. Forget I said anything.

Hey, for all you know I could be a delivery contractor or tradie or something and keep spreadsheets for business and tax purposes.

I’m not though…

PrinceOfAles 12:44 am
08 Mar 12
#11

arescarti42 said :

Holden Caulfield said :

arescarti42 said :

…I maintain a spreadsheet of fuel prices and the efficiency of my car…

Awesome. I’m having a dinner party this weekend, would you like to … oh, no, that’s okay. Never mind. Forget I said anything.

Hey, for all you know I could be a delivery contractor or tradie or something and keep spreadsheets for business and tax purposes.

I’m not though…

C`mon. It was pretty funny.

Cheap 8:59 am
08 Mar 12
#12

arescarti42 said :

Holden Caulfield said :

arescarti42 said :

…I maintain a spreadsheet of fuel prices and the efficiency of my car…

Awesome. I’m having a dinner party this weekend, would you like to … oh, no, that’s okay. Never mind. Forget I said anything.

Hey, for all you know I could be a delivery contractor or tradie or something and keep spreadsheets for business and tax purposes.

I’m not though…

You sound a lot more interesting than most people I have to endure at a dinner party

Very Busy 9:58 am
08 Mar 12
#13

Since you already have the LPG system installed, the cheapest option from here is to continue running on LPG.

As for the ACCC…well you might feel better by contacting them but when it comes to fuel prices they are just a big toothless tiger. “ACCC” and “fuel prices” have been used in the same sentence for decades. The oil companies will not be caught doing anything illegal in their quest for large profits.

These days, unless you cover much higher than average distances, the economic benefits of converting a vehicle to run on LPG are questionable.

In 1994 I converted a car that I still own to run on LPG. Back then LPG was 27.9 cpl and unleaded was 73.9 cpl. It was definitely worthwhile back then and only took 2 years of average driving to pay for the $2150 conversion cost. That car doesn’t do many kms these days so I removed the LPG system in 2010 because it was just a pain in the ass having the LPG tank in the way and having to get annual inspections for rego.

steveu 10:20 am
08 Mar 12
#14

I always thought that we produced our own LPG here in Australia. I guess I was wrong. I mean, something we produce here should remain cheaper, right? We shouldnt have to import it, and it couldnt be the companies increasing the price above what the increase in excise is, and using the excise price incease as the reason for the full price increase could it?

Or is the old rule that prices will be determined on what the market is willing to bear coming into play.

welkin31 10:58 am
08 Mar 12
#15

Hey arescarti42 – I enjoyed your post.
I have a 2004 Falcon Wgn on factory gas which has a range – 800km plus. Before the latest price hike I could do a 3 or 4 day work tour out beyond the MIA all on one tank for about $50. Those days are history now.
I have just looked for reasons for this latest price hike – no luck so far – it seems too early in the year for the 2.5c jump in the excise.
http://www.raa.com.au/page.aspx?TerID=1148
This page with a daily chart from FuelWatch in Perth shows the sharp jump on the 4th March from a stable 80c to ~90 now. The default chart is for ULP – just change that to LPG.
http://www.fuelwatch.wa.gov.au/fuelwatch/pages/public/priceTrendGraph.jspx
Here is an article dated 8 Feb warning of price hikes in Qld.
http://www.racq.com.au/about_us/news_and_community/news_and_media/stories/motorists_warned_about_lpg_price_hikes
Apparently the Saudis hiked their wholesale prices due cold in Europe.
We might see our prices ease later in the year – that would be a sight.

Thoroughly Smashed 11:17 am
08 Mar 12
#16

steveu said :

I always thought that we produced our own LPG here in Australia. I guess I was wrong. I mean, something we produce here should remain cheaper, right?

Producing our own doesn’t change global demand

Alderney 12:00 pm
08 Mar 12
#17

I always understood that LPG was a by-product of the petrol refining process. Therefore, they use the waste product rather than just dispose of it however they dispose of such things. Pump it into a river wasn’t it?

That’s all good, but it’s a bit rich to slug people unnecessarily for a product they would otherwise disgard.

I get the concept that government’s now want to tax it do to increased use etc and there is a supply chain to manage, but geez it’s almost money for nothing.

john87_no1 12:26 pm
08 Mar 12
#18

Thoroughly Smashed said :

steveu said :

I always thought that we produced our own LPG here in Australia. I guess I was wrong. I mean, something we produce here should remain cheaper, right?

Producing our own doesn’t change global demand

That is true but go and have a look at how much Venezuelan citizens pay for its petrol I think it’s around .02c a litre!! Australia has some of the highest LPG gas reserves in the world, our prices could be extremely low for LPG.

Bramina 10:48 pm
08 Mar 12
#19

What gets me is that people complain about the price of petrol when it hasn’t gone up that much. I remember cans of coke being 50c and a litre of petrol being 60c per litre. Now a litre of petrol is $1.50 or something per litre and you can’t get a can of coke for under $2 almost.

Compare petrol price increases to most things and it hasn’t gone up by much at all.

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