LPG conversion plan receives bi-partisan support

THE plan to establish LPG conversion mega-centres in a bid to cut reliance on imported oil has received bi-partisan support in the run-up to the Victorian election.

The proposal envisages large conversion centres where new vehicles fresh off the boats would be converted to liquefied petroleum gas (LPG) to switch more of the transport fleet to a home-grown energy source.

The advantage for drivers and fleet owners is that they would be able to take advantage of lower running costs thanks to excise advantages in comparison to petrol.

The rate of excise on LPG will be 12.5 cents a litre by the end of 2015, compared with 38.14 centres for petrol and diesel.

The Napthine Coalition government has agreed to provide $55,000 towards a preliminary study into the proposal to see whether demand would be sufficient to justify establishment of the conversion centres.

The grant, which was announced by the Victorian minister for manufacturing David Hodgett, mirrored an undertaking made by Labor shadow treasurer Tim Pallas.

The proponents of the scheme, the Victorian Automobile Chamber of Commerce (VACC) and Gas Energy Australia (GEA), will also help fund the study.

“This is an important milestone,” outgoing VACC chief executive David Purchase said.

“The demand study will establish if the LPG vehicle production proposal has legs.”“VACC, GEA and the next state government will each contribute financially to the study and it will determine, one way or the other, if the plan is sustainable. “Apart from large conversion centres in Geelong and Adelaide, the proposal also includes the establishment of a Centre of Excellence for the LPG industry.

The centre would conduct research and development into LPG and conversions as well as offer training services, develop production protocols and supervise accreditation and product certification.

The plan was developed in response to news that the three carmakers would be pulling out of Australia by 2017. It was designed to offer some automotive employment to the workers displaced in Victoria and South Australia by the closure of the car-making industry.

VACC and GEA estimate the plan could create as many as 500 jobs.

The target market for the converted vehicles are companies and authorities that run large fleets, as they can take most advantage of the lower excise thanks to the high mileages their vehicles cover.

VACC and GEA also believe there would be demand for LPG-powered SUVs, small cars, light-commercial vehicles and even hybrid cars.

Mr Purchase said the proposal was also based on the knowledge that Australia has large reserves of LPG and that greater use of LPG by the transport fleet would reduce Australia’s dependence on imported oil, improving the country’s energy security.

It would also help to reduce greenhouse gas emissions by the transport fleet, he said.

The rebates from the federal Government applying to LPG conversion of new ($2000) and used ($1000) vehicles ended on June 30.