Future bright for LPG industry

The Ford Falcon is Australia's only factory-built dedicated-LPG car.

Australia's LPG industry expects a six-fold increase in LPG-fuelled vehicles on its roads within 10 years, thanks to the fuel's cost and environmental benefits, improved fuelling and on-board storage technology and continuing support from vehicle manufacturers and the federal government.

LPG Australia president James Batchen told a conference in Canberra that LPG's increased role in transport within the domestic market was inevitable because of Australia's vast LPG resources.

"We are now third in the world in terms of LPG use - 10 years ago we were in first place. My role as president is to get us back to that number-one position again," said Batchen. "But that shouldn't be difficult because, unlike many of the countries we export to, Australia has a domestic surplus of LPG production, producing around 3.3 million tonnes and using about 58 per cent of that in the domestic market.

"It's forecast that by 2020 we'll be producing more like five billion tonnes.

"Currently we think we supply about 6 per cent of Australia's transport fuel, but looking at the resource available, we could move to 30 per cent within 10 years."

Website GoAuto reports that the LPG industry used the Canberra event to showcase the new liquid LPG injection systems that improve power outputs and fuel efficiency over less sophisticated LPG systems.

Batchen believes such technology will drive the popularity of the large-car market, which he said may ultimately only be sustainable with LPG use.

"Everybody knows that the big V6 and V8 market has been hammered in the last couple of years and Ford and GM almost went broke because they're building these large cars that no one wanted any more. The future of the large car is going to be LPG as that's the only economical way people are going to be able to afford those sorts of vehicles."

Batchen believes the old adage "big car for a big country" still holds true in a continent like Australia.

"In Australia it's still a popular market, it's a big country with lots of highways so the V6 family car is still going to be very important - the big issue is, how to make it affordable for them and with LPG I think we can."

Batchen highlighted this point by referring to the popularity of Australia's only factory-built dedicated-LPG car, the Ford Falcon. "Look at Ford's numbers - their Falcon range is almost 50 per cent LPG."

Even though the LPG conversion rate is very sensitive to the cost of petrol, Batchen said there were other considerations that could influence the decision to convert to LPG. "What drives people to switch fuels? Sometimes it's the price of oil, sometimes it might be other family budget considerations - maybe interest rates; the family mortgage has gone up, so they have to cut costs somewhere, maybe they can save on fuel costs.

"I'm not convinced it's just the oil price that drives people to convert."

Batchen didn't deny that the industry had some work to do to improve the appeal of LPG.

"People are happy and familiar with petrol; they need to be spurred on to consider an alternative. And that's part of what we're about, to say 'okay, LPG is a reasonable alternative'."