This blog is the final in our series on fuels. We aimed to clear up the confusion about which fuels are the best to use by looking at each one in detail – premium unleaded, E10 and E85, Diesel and finally, LPG.
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Have you converted your car to LPG?
LPG
There has been much discussion in the media recently in regard to excise (tax) on LPG, which was promised by the previous Federal Government and will be introduced at 2.5 cents per litre from December this year, increasing at 2.5 c/L each year until it reaches 12.5 c/L in 2015. While this makes converting to LPG or buying a new LPG car less attractive, how much impact will it really have?
If we assume you travel 20,000 kilometres per year in a large vehicle (these are the ones most often converted) that has a petrol consumption of 15 litres per 100 km, you will use 20,000 x 15/100 = 3000 litres of petrol. If we assume petrol is $1.40/L the petrol cost will be $4,200.
Fuel consumption when using LPG in dual-fuel (or bi-fuel) is around 30% higher when using LPG, so we can expect around 19.5 L/100 km, meaning a year’s usage will be around 3,900 litres of LPG. At 65 c/L for LPG, this would cost $2,535, a saving of $1,665.
A conversion for a modern vehicle costs $4,000-4,500 so if no excise was to be added, the payback period would be 2.5 to 2.7 years. After this you have paid back the conversion cost and are saving the difference between the petrol and LPG price every time you fill up.
With excise increasing by 2.5 c/L per year and ending up at 12.5 cents per litre, this would increase your yearly LPG cost by around $100 each year, to $3,023 in 2015, saving about $1,200 compared with petrol. This gives a payback period of around 3.5 years so you would want to be confident you would be keeping the vehicle for some time.
Of course, all these calculations are based on current fuel prices. If they change significantly, you would have to recalculate the amounts and payback periods.
There are also grants available for people wanting to convert their vehicle. See the AusIndustry LPG Vehicle Scheme for more information.
Have you converted your car to LPG and have you found it a cost-effective exercise?
