Monday, Jun 04, 2012 at 12:43
Once again, a post started and inflamed by ill-informed ranters who can't even do their research properly before they post.
The INTENTION for a road tax on LPG for road use was introduced in the 2003/2004 by Peter Costello, and was a move by the Howard Govt to ensure that road users of LPG "made their proper contribution" to road upkeep, via road taxes.
The road tax on LPG was not LEGISLATED until May 2011. Four bills were introduced under the current Labor Govt to apply road tax to LPG, LNG, and CNG (that are used in transport).
These bills were approved and passed, and are now law.
There were no objections to the taxing of alternative fuels by the Liberal Party, as it was INITIATED by the Liberal Party.
http://www.ato.gov.au/taxprofessionals/content.aspx?doc=/content/00244543.htm
The LPG tax commenced at 2.5c per litre in December 2011, goes to 5c per litre in July 2012, and increases 2.5c per litre every 6 mths thereafter, until it reaches 12.5c a litre on 1st July 2015.
There's a very interesting factor coming out of this. The tax is only applied to LPG used in road use. Tax-free LPG is still available for forklift use, and for domestic use - and when LPG is delivered in road tankers, it is invoiced in two separate invoices - one for taxed fuel going into tanks supplying Auto LPG, and one for untaxed LPG going into tanks supplying domestic gas.
Here's the kicker. It is illegal (from 1st December 2011) to use domestic LPG in road vehicles or to sell untaxed LPG as Auto LPG. Severe penalties apply for avoiding road taxes.
http://www.ato.gov.au/content/00298947.htm
The kick in the nuts for the Govt here, is that there is no way of knowing if someone using LPG, isn't buying (untaxed) domestic LPG, and then transferring the domestic LPG into their vehicle tanks! (easy to do).
The liquid fuels can have dye added to enable tax inspectors to
check on whether the fuel is taxed or untaxed (there's huge penalties in the U.K. and U.S. for those found with undyed or untaxed fuel in their vehicles fuel tanks) - but how can taxed or untaxed LPG be indentified??
I can see a lot of people using domestic LPG in vehicles, very shortly.
The LPG market in Australia is very complex, and involves a lot of horse trading. LPG is both exported and imported. The amounts of local propane and butane available often alter substantially, because both are sourced from Natural Gas (LNG) as by-products of the refining of LNG - and they are also sourced as by-products of oil refining.
When there is a shortfall in local supply of LPG, or an increase in local LPG demand, LPG is imported to make up the shortfall. It's not a matter of just redirecting LPG from the NW Shelf processing plants, as the likes of the NW Shelf partners have contracts for export LPG to fulfill, as
well as LNG.
The wholesale price of LPG in Australia is basically set by the Saudis, who essentially control world LPG prices, via the Saudi Aramco Contract Price - which is set on the first day of every month, and which stays at that price for the entire month.
http://www.raa.com.au/page.aspx?TerID=1144
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Follow Up By: Member - Bruce C (NSW) - Monday, Jun 04, 2012 at 18:01
Monday, Jun 04, 2012 at 18:01
Hi Ron.
From what you say it is clear that the current increases in LPG prices have nothing to do with tax increases as it can only account for a max 12.5 cents and that is not until 2015. currently at 15 cents from inception in July 2011
As you say "Horseplay" is the reason.
Cheers, Bruce.
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