LPG v Petrol prices

Submitted: Friday, Jan 04, 2008 at 00:18
ThreadID: 53094 Views:2303 Replies:5 FollowUps:6
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Hi All

Does anyone know why LPG prices rise proportionally to Petrol?

LPG seems to sit at half the price of ULP and I'm wondering if it's because the market gas price goes up proportinally or that the oil companys' just put it up to half the cost of ULP, as that's what the public is use to paying for it?

Also, I seem to remember Woodside being made to set aside a certain portion of the LNG for domestic consumption, so wouldn't this mean local consumers would get it for less than the market price??

Will.
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Reply By: Richard Kovac - Friday, Jan 04, 2008 at 00:31

Friday, Jan 04, 2008 at 00:31
ozwasp

the answer is in your question "Liquefied Petroleum Gas" LPG note the word Petroleum

LNG is Liquefied natural Gas

one man made, one GOD made... it's old but worth the read

Richard
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Reply By: Cruiserman1961 (QLD) - Friday, Jan 04, 2008 at 07:52

Friday, Jan 04, 2008 at 07:52
Hey ozwasp,
same reason diesel is more expensive despite the fact it is 30% cheaper to make.

Blatant profiteering of those poor innocent retailers.....

Maybe Australia should blackmail the rest of the world if they want uranium too???
I think my get up and go, got up and went.

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AnswerID: 279691

Reply By: Smudger - Friday, Jan 04, 2008 at 09:10

Friday, Jan 04, 2008 at 09:10
I asked my mechanic about LNG. "Sydney buses run on the stuff at about 20cents/litre, so why can't I get some of that action?" Evidently natual gas is extremely difficult to liquify and the cost of the ultra high pressure tanks and components required make it too expensive for domestic use.
As to the price of LPG, about 5 years ago I was told that during the northern hemisphere's winter the demand increases in Europe, because they use LPG for heating, and I've watched that fluctuaton ever since. The price does come down again at the end of our summer.
However, I'd never noticed that it tracks 50% parity with ULP. Maybe you've busted their scam mate.
AnswerID: 279708

Reply By: DIO - Friday, Jan 04, 2008 at 09:35

Friday, Jan 04, 2008 at 09:35
It's all about market, availability, demand and whatever the customer has been conditioned to. One thing about the oil companies (and probably others too) is that once they reach a price level, it is EXTREMELY rare for them to lower the price. So once upon a time we all shuddered at the prospect of 50c per litre, then 70c then heaven help us $1.00. That was the magic milestone for the oil companies. $1.00 it had then them years to achieve but once they got there (regardless of international prices) and the customers were 'conditioned' to it, then away they went. Now we have reached $1.50 it will/might stay that way for some time during which we are all 'conditioned' to it. I bet you anything you like that unless the Govt. intervenes, we are very unlikely to ever see a permanent pricing below $1.50. It doesn't really matter what the price of the commodity is, it's all about what the customer will (must) pay. The price of fuel is becoming so expensive that some motorists are having great difficulty affording to fill their tanks for just a night or weekend of 'cruising'. Now, if you are really concerned about fuel prices, lobby the Govt. to either reject continual exices/GST increases or have them lower the percentage of excise they receive. All these price increases are a real windfall for the Federal Govt. coffers one of the reasons they only pay marginal 'lip service' to motorists complaints. Looks like we will just have to get used to it. So in answer to your initial question, why does LPG price increase proportinially to petrol, because of world demand, northern winters, African unrest, Chinese growth, South American unrest, 'that's what the consumer will pay' etc etc.
AnswerID: 279712

Reply By: garrycol - Friday, Jan 04, 2008 at 09:58

Friday, Jan 04, 2008 at 09:58
It is an unregulated market, supply and demand and what the consumer is prepared to pay and what the supplier can get away with.

I am sorry but profiteering is not illegal.

If we are not happy with the price - do not pay it - hence the catch - we will pay it so the supplier can charge more.

It is called Capitalism.

Get used to it.

Garry
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Follow Up By: Jim from Best Off Road - Friday, Jan 04, 2008 at 10:47

Friday, Jan 04, 2008 at 10:47
Making a profit and profiteering are two entirely different things.

Profiteering is most definitely illegal.

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Follow Up By: Pete and Lez - Friday, Jan 04, 2008 at 12:56

Friday, Jan 04, 2008 at 12:56
Howdy Jim, Could you please enlighten the dimwit consumers like myself, what the difference is briefly, please.
Cheers Peter and Lez
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Follow Up By: Jim from Best Off Road - Friday, Jan 04, 2008 at 13:08

Friday, Jan 04, 2008 at 13:08
Pete

Profiteering is using techniques such as price fixing, entering into a cartel, etc to inflate profit.

Any form of activity that does not let market forces or completion have an influence on prices can be deemed to be profiteering.

For that reason you will always see products with a recommended retail price as it is illegal for suppliers to dictate a price to retailers.

Anyway, more importantly, how is life since the transplant? Back near to normal I hope.

Regards,

Jim.

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Follow Up By: garrycol - Friday, Jan 04, 2008 at 17:33

Friday, Jan 04, 2008 at 17:33
Depends what dictiionary u use.

The point is that in an unregulated market they can charge what they want to make profit as long as there is not collusion.

While less relevant to LPG we should be looking less at the profits and costs charged by the companies and look at the taxes and excises charged by Governments - I know who is profiteering.
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Follow Up By: Member - Brian A (QLD) - Friday, Jan 04, 2008 at 19:04

Friday, Jan 04, 2008 at 19:04
Hi All
In general the taxes and charges levied by government are so high that they have made it law, that it is illegal for a seller to show the selling price of the item, less tax, and the amount of government tax levied on the item as separate amounts!
Regards
Brian
Brian Adshead

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Follow Up By: Jim from Best Off Road - Friday, Jan 04, 2008 at 19:56

Friday, Jan 04, 2008 at 19:56
Sorry Gary,

Didn't mean to be uppity, I'm referrring to the ACCC interpretation of profiteering, which will clearly be different to the pure Dictionary meaning.

Governments and their departments use jargon and I guess I'm guilty of falling into the trap of using it.

Regards,

Jim.
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