The True Price of Propane Autogas

If you’ve spent your valuable time going through my “Fuel For Thought” blogs, you’ll find that although I attempt to remain fuel neutral (as long as it’s American), sometimes I drift back to propane autogas.

This will be one of those times.

Propane autogas’s operating performance properties, environmental characteristics, domestic production and cost structure all add up to create a very attractive equation.

However, we’ve found that many believe the price of propane autogas per gallon is comparable in cost to gasoline.

Reports from the U.S. Department of Energy have portrayed the per gallon price of propane for vehicles as though it was being bought for a barbeque tank, five to ten gallons at a time twice a year. While many of these surveyed locations can, indeed, fuel your vehicle, they’re charging a premium for this low-volume barbeque purchase.

Therefore, when the randomly selected locations’ fuel prices are surveyed and tallied, the cost per gallon reported is often much higher than our fleet customers are actually experiencing with their personal accounts.

Recently ICF International published a white paper entitled “The Price of Propane for Fleet Vehicle Use” (March 15, 2012). 

You can download a copy of the report, but to save you time I’ve listed three of the most important findings:

  • ICF International studied confidential transactions for more than 30 million gallons of propane sales.
  • Review of those transactions indicates a 2011 difference in price between gasoline and propane at $1.17 per gallon, after federal and state taxes were applied, and before any tax credits were applied.
  • ICF expects the difference to grow to between $1.50 and $1.70 per gallon in 2012.

This report takes into account the increasing price of gasoline based on global demand (against a finite supply) and the fact that our country exported over two billion gallons of propane last year. That last statistic should convince you that we have a lot of it here in the USA.

All any of us need is good information to make quality decisions. When I went through the ICF International report, it hit me that we finally are making steps toward cost-per-gallon clarity required to make a difference. That’s useful, accurate information.

Thank you, ICF International. You’ve given me some fuel for thought.

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