The Federal Government’s proposed $1000 LPG conversion subsidy would be good for the country and good for motorists wanting to save money on fuel, the Victorian Automobile Chamber of Commerce (VACC), said today.
VACC Executive Director, David Purchase, said an average family car’s conversion, one doing around 20,000 kilometres per year, is paid off in under a year.
“LPG is an obvious and sensible alternative to petrol,” Mr Purchase said.
“This country has abundant LPG and it makes sense for the Government to set policies to encourage motorists to convert their cars to LPG
“LPG can halve – and better – monthly fuel bills. It is also kinder to our environment.
“With LPG, motorists can run a large family car for less than the cost of running many small cars.”
Mr Purchase said there was currently 90 cents per litre (CPL) differential between LPG and petrol.
“Assuming the car costs $2,000 to convert to LPG (post the $1000 Government subsidy), and assuming a large car consumes 12 litres of petrol per 100km, then the 90 cent differential between petrol and LPG pays for the conversion in under a year,” he said.
“And even allowing for the slightly higher fuel consumption with LPG, some cars use up to 10% more LPG fuel per kilometre travelled, the savings still easily pay for the conversion.”
The savings between petrol and LPG can be shown as follows (using the 90cpl differential but assuming fuel consumption is not affected):
- $0.90 x 12 (litres) = $10.80 savings per 100km
- $108 saving per 1,000 km
- $1,080 saving per 10,000km
- $2,160 saving per 20,000km
- Payback period under 1 year (even if reducing this saving by 10% due to slightly higher fuel consumption)
“Australia is currently running a massive current account deficit due, in the main, to wildly escalating fuel imports. Petrol, light oil and diesel now account for well in excess of 50% of Australia’s trade deficit. Supporting LPG and encouraging more motorists to convert will help reduce our dependence on imported oil and petrol,” Mr Purchase said.
