LPG prices on the Border are artificially high and putting drivers off converting their vehicles, an Albury businessman said yesterday.
Prices per litre of up to 17 cents more than Melbourne has alarmed Albury Auto Gas owner Tas Davies.
Mr Davies said Border motorists were being forced to pay prices 25 per cent higher than the city, when the previous difference was about 5 per cent.
LPG prices on the Border are hovering around the 86.9 cents a litre mark, compared with 69.9 cents in Melbourne.
“Prices went up in December, which was shocking for LPG drivers but that was driven by international prices,” Mr Davies said.
“Since then, international wholesale has gone down quite significantly but prices in the local area haven’t.
“They’ve dropped about four cents a litre, though the wholesale price has dropped about 20 cents.”
Mr Davies said LPG had become affordable only for taxi operators, given their cars travelled up to 120,000 kilometres a year compared with 20,000 for most other cars.
The RACV raised the issue in March, saying there was no reasonable explanation for LPG prices not dropping to match wholesale price cuts.
It said this situation had not changed since.
RACV vehicle engineering manager Michael Case said there were about 230,000 LPG-powered cars on Victorian roads.
Mr Case said there was a large industry dealing with LPG conversions that was at risk if prices continued to remain higher than they should.
“This type of pricing behaviour needs to be investigated by the Australian Competition and Consumer Commission, as it is not only costing motorists but is also threatening to undermine the LPG industry,” he said.
Mr Davies said he had sought reasons for the high Border prices with industry groups, but doubted he would get a response because major wholesalers held sway.
Instead, he is looking at making a complaint to the commission.
Mr Davies said that while Melbourne was now a lot cheaper than the Border, historically that had not been the case.
“Albury’s usually been a pretty competitive market,” he said.
Mr Davies said he did not know why the prices in Albury had stayed so high though suspected it was a case of retailers — mindful of competitors not dropping prices — holding onto their better margins.
“I’m sure I’m not the only one frustrated by this,” he said.
Mr Davies said people had backed off from converting their vehicles to LPG.
“Where the price is now it’s still cheaper than petrol, but it’s not as compelling now.
“You’ve got to pay $3000 or $4000 to have your car converted.”
Mr Davies said that had had a “significant” impact on his business.