New Zealand High Consumption Fleets Use Propane

New Zealand’s population of 4.1 million has one of the highest car ownership rates in the world, with approximately 2.6 million passenger vehicles. New Zealand has no local automotive manufacturing and a high level of used vehicle imports, primarily from Japan. Almost half of the vehicle fleet is between 10 and 30 years old with the average age of a passenger vehicle being around 11.7 years. As a result, New Zealand has not benefited from new vehicle technology and emissions from the transportation sector continue to increase.

LPG (propane) is indigenous to New Zealand and produced from on and offshore gas fields. As natural gas exploration continues in New Zealand it is anticipated that LPG supplies will be plentiful. Recently, LPG prices have increased in New Zealand as long term negotiated contract prices have been replaced by international pricing based on Saudi Arabian contract index.

New Zealand introduced incentives and excise tax exemptions in 1980 for LPG and CNG (compressed natural gas) vehicles in response to the oil crises of the late 1970’s. By the late 1980’s New Zealand had over 50,000 LPG vehicles in use. At one time, LPG as a transportation fuel accounted for 90% of all LPG used in New Zealand. In the early 1990’s with world crude oil prices stabilizing and easing, the government removed the incentives and excise tax was imposed on LPG. The number of LPG vehicles declined to around 18,000 in 2002 and have further declined to approximately 10,000 vehicles today.

LPG remains a viable option for high consumption vehicles in New Zealand. The current LPG fleet is primarily high consumption vehicles such as taxicabs, police vehicles and commercial vehicles that can recoup the cost of conversion with approximately 40% cost savings in relation to gasoline. OEM vehicles are available from Ford, Mitsubishi, and Holden (GM Australia) and the remainder of the LPG vehicles are conversions. There are over 600 LPG fuelling points in New Zealand with most located at retail gasoline sites controlled by the major oil companies such as Shell, BP and Caltex.