UPDATED: The price of propane autogas

In an article about propane autogas that was published online on Sunday, I wrote that propane fueled vehicles in the U.S. pay $1.25 less per gallon than they would for gasoline. I got that fact from Stuart Weidie, president of Alliance Autogas.

Today I got an email from Gene Guilford, president of the Independent Connecticut Petroleum Association, who disagreed with that figure:

“According to the CT OPM survey of propane prices in CT, propane sells for an average of $3.14 a gallon.

Propane has 90,000 BTUs of energy content in a gallon, Gasoline has 115,000 BTUs of energy content. Therefore, a propane gallon to be equivalent in energy content to gasoline actually costs $3.98 [$3.10 + .84 = 3.98]. The propane number also assumes it is not subject to federal and state highway taxes, which currently adds another 65c per gallon to the cost of gasoline. If that tax is also added to the $3.98, then the final price would be $4.82.”

UPDATE: I just recieved the following email reply from Mr. Weidie:

“The data provided by the representative of the Independent Connecticut Petroleum Association is reflective of the confusion amongst the public when it comes to alternative fuels pricing. A common misconception is that autogas costs the same as retail propane. This is not correct. Autogas is the name for propane that is used as vehicle fuel – it has a different name and a completely different pricing structure.

Because of volume and economies of scale for fleet customers, the cost of autogas is not reflective of the prices of propane for residential, agricultural and commercial/industrial applications. The data provided by the Petroleum Association comes from a report that clearly indicates it lists propane “prices for home heating only” – that is, the price of propane delivered to individual homes.

My numbers are coming from fleets across the country who are pumping autogas into their vehicles, paying for it, and carrying passengers and cargo over American roads – doing the things that keep this country running. I’m using price-at-the-pump numbers. I do not have any numbers specific to Connecticut, but here are a few from some of our public and private fueling stations in the Northeast, Mid-Atlantic, Midwest and West Coast (prices vary due to different state taxes and transportation costs for different customer locations):

We have customers paying $2.37/gal of autogas next to $3.92/gal gasoline.

We have customers paying $2.47/gal of autogas next to $3.74/gal gasoline.

We have customers paying $2.40/gal of autogas next to $3.75/gal gasoline.

We have customers paying $2.52/gal of autogas next to $3.70/gal gasoline.

We have customers paying $2.29/gal of autogas next to $3.85/gal gasoline.

These are not exceptions – these are reflective of current price differentials nationwide. And all of those prices are before subtracting the 50-cent-per-gallon federal tax credit. Fleets of all types, both public and private, are eligible for the credit.

Using the prices that our customers are paying right now, and including the 50-cent-per-gallon tax credit that they qualify for, the average price of autogas per-gasoline-gallon-equivalent is $1.69 less than gasoline – substantially more savings than the figure of $1.25/gal that I gave you before.

Using autogas yields real cost savings for taxi companies, school districts, police and sheriff departments, and all types of private businesses – both large and small. Those cost savings preserve jobs and strengthen our economy. Autogas is right here, right now. It’s already widely used around the world, and it’s beginning to take hold in America.

Misinformation damages our nation’s progress toward energy security. Well-written articles like the one you published Sunday are a great step toward raising awareness about this clean, affordable, abundant and American-made fuel that more fleets should be using.

*While the Petroleum Association stated that autogas vehicles experience a 22% loss of efficiency, our real world experience shows a differential of approximately 8-10%, due to autogas producing a more complete combustion process and its higher octane rating of 105. My cost-per-gasoline-gallon-equivalent calculations are as follow:

A is the average autogas price that factors in the tax credit: (sum of all 5 autogas prices minus five 50-cent tax credits) divided by 5

(12.05 -2.50) / 5 = $1.91 per gallon autogas

B is the average price of autogas per gasoline gallon equivalent: multiply A times 1.1 to account for a 10% loss of efficiency when using autogas compared to gasoline

1.91 x 1.1 = $2.10 per gge

C is the average price per gallon of gasoline: Sum of all 5 gasoline prices, divided by 5

18.96 / 5 = $3.79 per gallon gasoline

Subtract B from C to get the price differential

$3.79 – $2.10 = autogas costs $1.69 less per gasoline gallon equivalent”

Categories: General
Vinti Singh