Gas deflates with petrol price

HOLDEN Special Vehicles might be the brand that finally puts liquid petroleum gas (LPG) on the radar of private customers.

The premium performance outfit has confirmed it will go ahead with a plan to build dual-fuel petrol/LPG versions of its V8 muscle cars early next year.

GoAuto can confirm the HSV LPG system delivers great performance in prototype form, but that does not reduce the size of the task HSV faces to convince its customers that LPG is the right option.

Ford Australia has been wrestling with this conundrum for some time, despite a strong position with its E-Gas Falcon range, which is the only model currently included in official VFACTS new-car LPG registrations (others, including dual-fuel Commodores, are regarded as ‘after-market’ and therefore registered as petrol cars).

These VFACTS statistics show that just 10 private buyers registered new LPG-powered vehicles (Fords) in August – a figure that tells only a bit of the story.

Left: Ford's E-Gas engine.

For a broader picture, we look at the federal government’s LPG Vehicle Scheme statistics which show that 3731 subsidy grants were paid out to private car owners in August, compared with 8985 in the same month last year – a fall of more than half.

Year to date, LPG private vehicle conversion grants are down 31 per cent, to 41,088 – a decline that LPG Australia attributes to a combination of factors, including the phasing out of the federal subsidies, decline of petrol prices and general economic conditions this year.

LPG private sales have never been massive, but they have not been this low since the Howard government introduced the incentives for private LPG customers in late 2005 as surging fuel prices became a major political hot potato.

From January 1 to end of August 31, 2005, the VFACTS-only LPG new-car sales stood at 112, but shot up to 472 as fuel prices stayed high and customers took advantage of the scheme.

Easing fuel prices saw the number drop to 267 for the corresponding period of 2007, before a record fuel price surge meant 428 private customers went for LPG in the same timeframe last year.

The most important factor in this year’s dramatic drop-off is undoubtedly the price of petrol, which slumped during the last quarter of 2008.

The same issues affected the LPG fleet market, with year-to-date sales dropping off from 8491 in 2008 to 6518 this year.

The free-falling fuel price even made HSV hold off on its LPG production plan, although it has now decided to press ahead regardless.

While many HSV dealers don’t see the appeal, HSV managing director Phil Harding views LPG as “something to have in the cupboard”, which can be viewed as kind of insurance policy if petrol prices go crazy again.

Good product is the key to convincing private customers that LPG is a smart option and to move beyond stereotypes of clapped out taxis and backfiring home conversions, but a good price spike would be a great help.

It seems that nothing opens up people’s minds like a pain in the hip pocket.