CAB4 Taxis HB Ltd owner Wayne Wilson runs his taxis on LPG and says it has meant he can keep prices low. Photo / Warren Buckland
CAB4 Taxis HB Ltd owner Wayne Wilson runs his taxis on LPG and says it has meant he can keep prices low. Photo / Warren Buckland
When Hawke's Bay mechanic Richard Clarke was operating his shop in the early 1990s, he was booked out for months, converting people's cars from petrol to LPG.
Petrol prices had skyrocketed including in the lead-up to the Gulf War and people were eager to find an alternative to petrol.
Inthe past few weeks - as petrol prices have hit record prices largely due to the war in Ukraine and sanctions on Russian oil - Clarke has started receiving calls from people interested in switching from petrol to liquid petroleum gas (LPG).
Most cars can be converted to run on the gas at a cost of about $6000, in a process which involves putting in a new tank and hooking it up to the engine.
The cost of LPG is about $1.20 a litre and the gas is mainly sourced from New Zealand, meaning it does not fluctuate with overseas oil or gas prices.
That is in stark comparison to petrol which is now costing more than $3 per litre for 91 and 95 at most petrol stations - and experts say it will likely climb higher.
"I am getting a few calls now," Clarke said.
"There has been a gradual interest in people wanting to convert, in terms of inquiries. However, the cost of conversion is really quite high."
Fuel prices surged past $3 for 91 in Hawke's Bay this week. Pictured is BP Bayview. Photo / Paul Taylor
He said demand to convert to LPG had been "absolutely dead for 10 years" because of the initial cost but it could be a viable option for some now.
"Some people are spending $200 or $300 per week on fuel. If they can save $200 a week that is worth their while - it is probably worth that $5500 [to convert]."
Clarke, who owns Premier Auto Repairs in Hastings, and has a licence to do the conversions, said the last quote he did for a vehicle a few years ago was $5500.
He said the conversion could be done in most cars but there were some issues with the latest models, which didn't operate as well on the gas.
He explained LPG was currently about half the price per kilometre compared to petrol, when you take into consideration LPG being less efficient per litre.
CAB4 Taxis HB Ltd, based in Hastings, owner Wayne Wilson said he has four Ford Falcon taxis which all run on LPG.
"It is a relief when I drive past and see petrol stations with the high prices on the board."
He said he pulls into the Caltex on Omahu Rd in Hastings and fills up at the pump, which he said costs him as little as $1.02 a litre.
CAB4 Taxis HB Ltd owner Wayne Wilson has been relieved he doesn't have to pay high petrol costs. Photo / Warren Buckland
It was the only petrol station he knew of near Hastings where you could fill up on LPG.
"The good thing about it is I give it back to my customers. I haven't changed my prices in three years."
He said on a full 96-litre tank he could drive 680km.
Wilson said because LPG was sourced from New Zealand it meant the price did not fluctuate as sharply as petrol, and it was good for him as a business owner.
Wilson said he had been busy of late, particularly with weddings across Hawke's Bay.
WHAT TO EXPECT WITH RISING PETROL PRICES
AA principal adviser Terry Collins said the UAE this week announced it would ramp up its oil exports following the sanctions on Russian oil.
He said that led to the international cost of oil (Brent crude oil) dropping from almost US$140 per barrel last Sunday (a 14-year high) to US$112 per barrel on Thursday.
To put those prices in perspective, he said in early February the international cost of oil was about US$92 per barrel.
Pak'nSave Tamatea has some of the cheapest fuel in Napier. Photo / Paul Taylor
Collins said the drop this week might just be a blip, and the value of crude oil could quickly rise again.
"I would have to see weeks of this [downward] trend before I have any confidence that the price [of petrol] will soften."
He said many companies had already made large orders at high prices which would be felt at the pump.
He forecast petrol prices to continue to rise in New Zealand in coming months and he would not be surprised if petrol hit $3.50 for 91 and even $4 for premium grade fuel.
"I'm not ruling that out. It's already $3.50 for 98 in Wellington."
As for LPG as an alternative, he said there was a Government review underway which might see taxes significantly increased on LPG use.
"There is very few [LPG] cars left. There would be less than 2000 LPG cars left [in New Zealand] of a fleet of about three and a half to four million."
A Napier petrol station owner, who did not want to be named, said the large increases in petrol prices in recent weeks had resulted in a drop in the amount of fuel being bought by motorists.
"Because the petrol prices have gone up so much - so, so much - people if they don't have to go into town simply won't go."
