KEY POINTS:
The price of liquefied petroleum gas (LPG) has skyrocketed, and the increase is being blamed on a new contract and high international demand.
The price of LPG has been steadily climbing over the past two years but was pushed up significantly when new internationally-negotiated contracts came into force on New Year's Day.
Dunedin Taxis director Tony Ross said he could not believe it when he went to fill up his Ford Fairmont vehicle yesterday, and discovered he was paying $1.29 a litre.
"I only paid $1 a litre a couple of days beforehand," he said.
"You can't tell me they can put up the price by that much in that time."
About 80 per cent of the Dunedin Taxis fleet is LPG-powered. '
'They use the excuse that they are just reflecting international markets. But LPG is made here. There is no extra cost. They are just helping themselves."
Mr Ross said fuel made up 30 per cent of overheads for a taxi but no decision had been made on whether fares would be increased.
He said taxis on average used 30 litres of fuel a day.
"The reason everyone changed over, and was encouraged to change over was the price. Now you've got to wonder."
Fellow Dunedin Taxis director Charles Tomkinson said the price for LPG was at 60c a litre for a long time but had slowly been creeping up in the past couple of years, but the latest increase was by for the heaviest.
It cost about $5000 to convert vehicles to LPG, but gas companies offered interest free loans for conversion. LPG is used to heat many barbecues.
Shell yesterday was charging $1.29 a litre for LPG, BP was charging $1.20c a litre and Caltex was charging $1.26c at Dunedin service stations.
The price increase has been caused by a new negotiated contract which reflected international pricing.
Gas retailers and suppliers could not be contacted yesterday to confirm the actual size of the price rise, but one local contractor, who declined to give his name, said the price rise was similar to what was happening with dairy products.
As the international price of LPG rose, the national price had to reflect that, despite how much of it was produced locally.
Shell spokeswoman Jackie Maitland said a new contract for LPG had been negotiated and it reflected overseas prices.
It was linked to the Saudi contract index, which reflected international prices, which were at record highs.
LPG
* What is it ?
LPG is liquefied petroleum gas, a mix of hydrocarbons, mainly 60 per cent propane and 40 per cent butane. When these mixtures are lightly compressed they change from a gas state to a liquid.
* Where does it come from ?
LPG is produced from onshore and offshore gas fields in Taranaki, the country's biggest domestic producer. But as these fields grow low, the gas is being imported from overseas, especially Australia.
* Where is it used ?
It is used in heating, water heating and cooking. It is also used to fuel cars and heats many barbecues. It heats more than 40,000 homes, and powers more than 10,000 vehicles in New Zealand.
- Otago Daily Times
