To accelerate the adoption of alternative fuels and to offer lower-cost fuel options than afforded by gasoline, Australia is now offering A$1,000 (US$760) toward the purchase cost of a new Liquefied Petroleum Gas (LPG)-powered vehicle, and a grant of A$2,000 (US$1,519) to the cost of converting existing private vehicles to LPG.
Australian Prime Minister John Howard made the announcement during a statement to Parliament on energy initiatives.
The Australian LPG Association estimates that, on average, the fuel bill for a six-cylinder vehicle travelling 15,000 kilometers a year would be cut by $27 a week, or more than $1,400 a year, following conversion to LPG. Combining those fuel savings and the A$2,000 rebate would result in recouping the approximate A$2,500 conversion cost in four months, according to the Prime Minister.
The estimated cost of the LPG incentives is A$677.1 million (US$ 500 million) over the eight year life of the programme. Taking into account revenue forgone, the total cost is more than A$1.3 billion (US$987 million) over eight years.
LPG is Australia’s largest alternative transport fuel, and the country has the capacity to produce substantial amounts. LPG is readily available through 3,200 service stations in Australia, nearly half of those in regional or rural areas.
Howard also announced the additional expenditure of A$17.2 million (US$13 million) over three years to reduce the infrastructure cost to retailers of installing new pumps or converting existing pumps to E10 blends and to encourage sales of E10.
LPG is a mixture of several gases with propane as the chief ingredient. LPG is formed naturally, interspersed with deposits of petroleum and natural gas. Natural gas contains LPG, water vapor, and other impurities that must be removed before it can be transported in pipelines as a salable product.
LPG vehicles emit about one-third fewer reactive organic gases than gasoline-fueled vehicles. Nitrogen oxide and carbon monoxide emissions are also 20% and 60% less, respectively. Unlike gasoline-fueled vehicles, there are no evaporative emissions while LPG vehicles are running or parked, because LPG fuel systems are tightly sealed. Small amounts of LPG may escape into the atmosphere during refueling, but these vapors are 50% less reactive than gasoline vapors, so they have less of a tendency to generate smog-forming ozone. LPG also has an extremely low sulfur content.
LPG delivers roughly the same power, acceleration, and cruising speed characteristics as gasoline, albeit with a somewhat reduced driving range, due to an energy content 70–75% that of gasoline. LPG’s high octane rating (around 105) means that an LPG engine’s power output and fuel efficiency can be increased beyond what would be possible with a gasoline engine without causing destructive knocking. Such fine-tuning can help compensate for the fuel’s lower energy density.