APA went into voluntary administration after the government's excise on the clean fuel saw demand for LPG tanks halved since the budget, forcing APA to the wall.

The rise follows previous assurances from Prime Minister Howard to the Australian Liquefied Petroleum Gas Association President Alan Beale, that the government had no such plans for an excise.

The Australian Financial Review even uncovered a letter from the Prime Minister to Beale stating: "I also appreciate that the imposition of an excise would have implications for the LPG retail fuel industry and LPG conversion businesses."

Investment in the use of LPG as a cleaner fuel option has grown since Holden and Ford introduced the first factory-produced LPG cars in 1993. Now the industry is faced with an uncertain future, as the government has given no guarantees as to the level of excise as it is progressively introduced from 2008.

Manufacturers in the industry are now concerned that the price for autogas could rise from 50 to 100%, putting it on par, or even higher, than petrol prices.

The Australian Democrats have claimed the governments decision will kill off the emerging clean fuels industry with party energy and resources spokeswoman Lyn Allison saying that the government has been backpedaling on plans to foster the industry.

"Taxing alternative fuels at the same rate as petrol will strangle the industry before it even has a chance to establish itself."