LPG grant on wind-down
From the end of June, you'll be paying more for your LPG conversionThe winding-down of the subsidy on LPG conversions on existing cars begins from the end of June.
Presently $2000, the federal government grant will drop to $1750, on its way down to $1000 by 2013 for a final adieu in mid 2014.
The grant as it currently stands makes a significant impact on the overall conversion cost which, according to industry authority LPG Autogas, ranges from around $2500 to $4500 depending on the type of vehicle.
It was the Howard government that introduced the LPG subsidy in August 2006 -- with a projected shelf life of eight years. Under the scheme, cars bought new with LPG attracted a $1000 grant from the government, while owners converting existing petrol-fueled cars benefited from the full $2000 subsidy.
Subsequently, the Rudd government doubled the grant for new-car buyers (more here). The grant has generated a significant rise in LPG conversions following increases in average petrol prices that had surged past $1 a litre by the second half of 2004. At that time LPG -- although it generally returns lower efficiency per litre than petrol -- was around half the price of unleaded petrol.
As well as lower prices, LPG also offers benefits in terms of reduced exhaust emissions. Carbon monoxide (CO), carbon dioxide (CO2), hydrocarbons (HC) and oxides of nitrogen (NOx) are at lower levels than petrol-fueled engines.
According to LPG Australia, 125,000 vehicles were added to the national roster of converted vehicles during 2008.
The eventual scrapping of the subsidy will undoubtedly have an effect on the number of conversions and the LPG industry, as would be expected, decries its eventual demise.
Mahmood Hussein, who is managing director of installer franchiser GasPower Australia, said "For the Aussie battler living in the outer suburbs, the government was removing the only realistic option they had of reducing their fuel cost by $35 -- $50 per week".
LPG Australia's Phil Westlake (pictured) said the emissions savings peculiar to LPG would be difficult for any other type of alternative fuel to match.
"This is a blow to the industry and the installers who have invested in LPG." he said.
The grant drops from $1750 to $1500 from July 1 2010, to $1250 from July 1 2011, to $1000 from July 1 2012 and winds up on June 30 in 2014.
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