Australia's Government Supports Propane as an Alternative Fuel

Australia, similar to Canada, has an excess supply of propane and 85% of propane is produced from natural gas.

On August 14, 2006, then Prime Minister, John Howard outlined a $1.6 billion (Australian dollars), eight year plan to reduce gasoline consumption and ease gasoline pricing to consumers. The recently elected government, led by Kevin Rudd has maintained the existing LPG (liquefied petroleum gas or propane) program and soon after their election the new government ratified the Kyoto Protocol.

The government provides a $1,000 grant to consumers who purchase new factory fitted LPG vehicles and a $2,000 grant to consumers who convert their vehicles to LPG for private use. The total cost of the program over eight years was estimated at $677 million.

As part of the overall program, incentives were put into place to develop E10 infrastructure, to expand renewable remote power generation, to expand the seismic acquisition program and also to identify potential on-shore energy solutions.

The LPG vehicle program was the main thrust and conversion activity instantly increased and has since exceeded expectations. In the first five months over 25,000 vehicles were converted and as of February 2008 over 105,000 vehicles have been converted under the program.