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Australian government encourages motorists to switch to LPG |
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| by Fairfax - Tuesday, 15 August 2006 It will bring forward a $1000 subsidy to accelerate the conversion of cars to run on liquefied petroleum gas, due to be introduced in 2011. The cabinet decided on new subsidies for ethanol installations at petrol stations to encourage greater use of the cheaper additive to petrol. The Government is expected to provide assistance for research to improve storage of LPG in cars and to encourage fuel efficiency. The cabinet decided on an advertising and education campaign to run in conjunction with the petrol industry to encourage motorists to use ethanol and retailers to pass on the cheaper price. It decided against changes to excise taxes on petrol and LPG and will keep the plan to increase excise on the gas in 2012. Cabinet has wrestled this week with the politics of petrol prices - one of the big challenges for the Government as it prepares for the 2007 election. But at this stage, the Government is desperately playing down expectations that it can do anything substantial to help hard-pressed motorists. Any assistance is likely to be only the first stage of a broader energy policy to be released closer to the election. The Prime Minister, John Howard, said yesterday that the Government was looking at "a number of practical measures" to address motorists' concerns. But he was careful to add that these would help only "at the margin". The Government repeatedly denied it would reduce the impact of fuel excise in 2001, when higher petrol prices angered motorists. It then promptly scrapped the indexation of the excise. The fall in the price as a result of indexation had helped the Government out of a hole but was not lasting and not memorable. However, that experience has fuelled the Government's reluctance to cut excise now. As the Government sees it, cutting taxes is not likely to lead to much of a drop in petrol prices, and certainly not to a sustained fall that would be noticeable at next year's election. As Mr Howard has pointed out, the Government could cut taxes on fuel and lose about $3 billion in revenue, only to see the petrol price rise due to international supply problems and gobble up the gains. Motorists might then blame the Government even more than they do now. So the Government will instead blame the international market for the price rises and ensure it is seen to be encouraging the use of cheaper additives and alternatives. "We must not lose sight of the central fact that the cause of high petrol prices is the high world price of crude oil … But at the margin, we may be able to make a difference, and that's what we are looking at," Mr Howard said. |
Related Links The Australian government offered motorists up to 2,000 dollars (US 1,530) to convert their cars to run on liquid petroleum gas, as spiralling global oil prices cause the costs of petrol to soar.
Gasoline prices have surged by more than 15 percent in Australia over the past year, helping push headline inflation to 4.0 percent and posing a political headache for the government.
Prime Minister John Howard on Monday said his government would spend 1.576 billion dollars over the next eight years developing alternative fuel sources.
The centrepiece of the plan is a cash incentive scheme to encourage drivers to switch to LPG, which is in abundant supply in Australia given the country's natural gas and oil reserves.
In a statement to parliament, Howard announced a cash grant of 1,000 dollars toward the purchase of new, factory fitted LPG vehicles.
The government would also contribute 2,000 dollars toward the cost of converting vehicles to use LPG, which ranges from 2,500 to 4,000 dollars.
"This is a difficult time for Australians faced with high petrol prices and it is only appropriate that the benefits which accrue to Australia from our substantial resource base flow through beyond a narrow part of our society," said Howard.
Spiralling oil prices have seen the cost of unleaded fuel rise to just under 1.40 dollars a litre in major metropolitan areas, compared with around 90 cents six years ago.
Howard has described the rise as "the greatest worry of my political life" and a poll released Monday showed that 75 percent of respondents were unhappy with the government's response to the price hike.
Howard said that the cost of LPG per litre was around 40 percent of the price of unleaded fuel. He said for an average six cylinder car travelling 15,000 kilometers (9,320 miles) a year, motorists could cut their fuel bill by 27 dollars a week.
With the government grant, it would take just four months to cover the cost of the conversion, he added.
According to the government, Australia has among the lowest petrol prices in countries belonging to the OECD (Organisation for Economic Cooperation and Development), partly due to lower fuel excise.
Howard said unleaded fuel prices were 58 percent higher in France, 67 percent higher in Germany and 70 percent higher in Britain.
The government will also encourage increased oil exploration to reduce the nation's reliance on imported fuel and encourage the use of ethanol-blended petrol.
The National Road and Motorists Association (NRMA) welcomed the LPG conversion subsidy, but said it would have a limited appeal.
NRMA president Alan Evans said LPG tanks used up plenty of room in car boots and said the fuel was best suited for vehicles that were driven long distances and often.
Arthur Papanatos fits another LPG tank at his Melbourne company, where business, not surprisingly, is booming.
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Thursday, 18 February 2010
Hottest Temperature Ever Heads Science To Big Bang | ||||
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