Experts predict that Australia’s natural gas industry will be unable to meet domestic demand in the next few years. Renewable energy sources and the swift uptake of grad-scale battery storage is threatening gas-fired power. This could eradicate the need for liquefied petroleum gas (LPG). This could have severe repercussions for Australia’s LPG gas suppliers.
What is liquefied petroleum gas?
Liquefied petroleum gas is a hydrocarbon gas. It has a very low boiling temperature. Therefore, it is often stored in pressurised containers to prevent it from evaporating. Under pressure, LPG liquifies. This makes it easy to both transport and store in gas bottles or larger tanks.
LPG is a colourless, low-carbon and efficient fuel. It has a broad range of uses, including heating houses, supplying gas cookers, and as a household or industrial propellant. An estimated one million Australian homes use LPG for cooking, hot water systems and space heating. A further seven million households rely on the gas for barbeques or outdoor heating.
LPG may consist of propane, butane or both gases together. Propane is employed when powering barbeques, off-grid LPG central heating, LPG gas cookers, caravans and other applications. Butane is more suitable for indoor portable heaters, as a refrigeration fuel and as a propellant.
How much is LPG gas in Australia?
The price of LPG in Australia fluctuates over time. Various factors affect this, which have nothing to do with LPG gas suppliers. For example, the world LPG price benchmark is the Saudi Aramco LPG price, also referred to as the Saudi CP LPG. The Saudi Aramco LPG price changes monthly. This means that LPG gas suppliers in Australia must also reevaluate the price of LPG each month.
The USD-AUD exchange rate
Australia only produces a small proportion of the world’s LPG. Consequently, it is unable to influence LPG price benchmarks. Likewise, because the international price for LPG is measured in US dollars, the exchange rate with Australian dollars is also important. For example, if the Australian dollar is strong compared to the US dollar, the price of LPG in Australia may be reduced.
Seasonality also affects the price of LPG. This is because worldwide demand increases in the northern hemisphere’s winter. People in colder regions need to buy more gas for heating their homes. As a result, this higher demand causes LPG gas suppliers to tighten supplies. Therefore, prices globally increase.
LPG gas suppliers vs mains gas suppliers
There are different costs to pay for LPG gas compared to mains natural gas. Often, LPG users have to pay a Gas Service Charge of about AUD $35 to $45 per year. This is essentially to cover the costs of ‘renting’ the gas cylinders from the LPG gas suppliers. However, this cost is less than the ‘supply charge’ that households connected to the mains natural gas network must pay. Therefore, for those with moderate to low gas usage, LPG gas suppliers may offer a better deal.
Which are the cheapest and most expensive LPG gas suppliers?
Prices of LPG differ between LPG gas suppliers. Also, LPG suppliers are not overly transparent with their pricing. Therefore, comparison websites, such as Canstar Blue, are useful for finding the best deals. Canstar Blue finds that Supagas is the best of the LPG gas suppliers that it compares. In contrast, as of 2nd August 2021, it lists Origin last out of the four gas companies on its website. The criteria include overall satisfaction, value for money, customer service, delivery service, bill and cost clarity, and ease of sign up/purchase.
Which are the most customer-oriented suppliers of gas bottles in Australia?
Supagas scored five stars in all of Canstar Blue’s categories for LPG gas suppliers. The company offers home delivery to its customers. Alternatively, it has locations to buy in person. At these places, customers can replace or refill their empty gas canisters. Moreover, Supagas provides gas installations, depending on location.
Elgas is one of the largest LPG gas suppliers in Australia. It has over 40 branch depots across the country. Customers can either buy gas tanks and bottles from Elgas locations.
Alternatively, the company has two home delivery services. One automatically delivers LPG through scheduled tanker deliveries. This means that customers’ gas bottles get refilled for them. The other option requires buying two gas bottles that are linked to a changeover valve. When one bottle runs out, the connection automatically switches to the other bottle. Once this happens, the customer needs to contact Elgas to arrange a replacement delivery.
Benefits of using an LPG gas supplier
Finding an LPG gas supplier, instead of relying on the main gas network, may be more convenient for some people. This is especially true for those living in remote areas with no connection to natural gas. It is also better for those who use very little gas. They can simply buy canisters of LPG as and when they need them.
LPG vs natural gas
Another key advantage of LPG is that it is a cleaner energy source than natural gas. It produces 29 per cent less carbon dioxide (CO2) than gas oil and 25 per cent less than heavy fuel oil. According to Gas Energy Australia, if Australian households switched to LPG instead of electricity for heating their water, space and for cooking, they could at least halve their greenhouse gas emissions.
Disadvantages of LPG
However, LPG is still a byproduct of the gas and oil industry. It still emits CO2 when it is burned. This contributes to global warming for centuries. If we are serious about preventing climate change, we need to stop all fossil fuel production. Only renewable sources can meet our energy needs without jeopardising our planet.