Minister for Industry and Resources Ian Macfarlane said as of last week, the Government had received 24,905 claims worth almost $50 million for LPG conversions, while new vehicles fitted at the time of manufacture accounted for 308 claims worth $308,000.

Macfarlane said he was pleased to see “such an overwhelming response” from motorists wanting to use LPG as an alternative transport fuel.

“LPG workshops are flat out coping with the demand and approved installers have had to employ more people to meet the strong demand,” he said.

The LPG Vehicle Scheme provides a tax-free grant of $2000 to owners of private vehicles who convert their vehicles to LPG, and a $1000 grant towards the purchase of a new LPG vehicle.

Around the same time this scheme was announced, the Western Australian Government doubled its own LPG conversion subsidiary to $1000.

PetroleumNews.net understands that about

3.5MMtpa tonnes of LPG are produced in Australia each year and about 2.3MMtpa of this is used in the domestic market.

LPG is substantially cheaper than petrol and produces 20% less greenhouse gases.

The bulk of the LPG – which is propane, butane or a mix of both – is stripped from the gas stream before natural gas is liquefied to produce LNG and is sold separately from liquefied natural gas. Unlike LNG, LPG is sold on the domestic and international markets.

However, the fuel's ability to reduce dependence on oil imports is limited as widespread use of LPG in vehicles would soon lead to Australia becoming an LPG importer.