It's a Gas

About twelve months ago I had one of my vehicles – the one I use to drive long distances – converted to LPG. By now, it has traveled 30000 since the conversion, and taking into account the subsidy provided by the federal government, the conversion has paid for itself.

For that twelve months, the price of LPG in Queensland (where I live) has sat more or less in the mid fifties (cents per litre).

In the last fortnight, it has suddenly risen to the high sixties, representing an increase of about 25%. The LPG Autogas Australia website provides this information about the origin of the product –

LPG can be obtained from two different methods or processes.

Most commonly in Australia it is extracted directly from ‘wet’ natural gas or crude oil. Almost 80% of Australian LPG is produced from this process and includes places like Bass Strait (VIC), Cooper Basin (SA), Kwinana (WA), North West Shelf (WA) and Surat Basin (QLD).

LPG can also be obtained as a by-product of the petroleum refining process which produces around 20% of Australian supplies. There are seven local refineries - Mobil Altona (VIC), BP Bulwer Island (QLD), Shell Clyde (NSW), Shell Geelong (VIC), Caltex Kurnell (NSW), BP Kwinana (WA) and Caltex Lytton (QLD) all producing LPG.

Australia has plentiful natural supplies of LPG and in 2005 exported 1.6 million tonnes (about 3 billion litres).

If this is the case, what is the reason for the dramatic increase? What has changed? Or have the oil companies simply decided that they can make a greater profit, understanding the the ACCC seems impotent to identify price-fixing in terms of unleaded prices, and they’re safe to work the same scam on LPG?

Sounds like an invitation for an aspiring investigative journalist to get busy.