LPG - Exceptional Energy: Poland and beyond
Since the conference was held in Warsaw, Poland and included the presentation of POGP's (Polish LPG Association's) annual report (for 2016), let's start with that country, shall we? LPG sales in Poland were by 4,9% higher in 2016 than in 2015, which surprised many since 2016 was the year when certain regulations discouraging LPG trade were introduced. Overall, the market consumed 2,355 mn t of the fuel, of which 1,79 mn t (76% of combined consumption, a typical figure for Poland) was autogas.
Autogas use rose by 1,1% over the 2015 figure. According to POGP, this was in part thanks to the growing number of factory-converted autogas-powered cars available and the improving perception of the fuel. However, the driving factor remains LPG's price advantage over petrol. Large numbers of imported used cars (well over 900 thousand in 2016, of which 59% were petrol cars) also contribute to the growth tendency.
As for the number of cars running on LPG in Poland, the figure rose to 2,977 million in 2016. This is by 63 thousand net more than the year before, with 110 thousand actual conversions carried out. This means some old vehicles were scrapped, but also shows the registration system is imperfect and some converted cars slip through it. As a consequence, the actual number of autogas-powered vehicles in Poland could be beyond the 3 million mark. Interestingly, percentage-wise cars fueled with LPG now account for a smaller part of the overall car park – 14,6% in 2016 against 14,8% the year before.
Let us now move to an overview of the German market, as presented by Adam Lewandowski, area director at Faerber Gas. Compared to Poland, the LPG sector in Germany isn't as strictly regulated, but paradoxically the autogas sector is shrinking rather than expanding (down from 500 thousand in 2012). This is primarily because autogas excise tax level is only guaranteed until December 31, 2018. The sector is lobbying to extend the guarantee until the end of 2023, but the outcome remains uncertain.
If excise tax does rise, retail pump price of autogas would go up, presumably discouraging many drivers from converting their cars. And drivers aren't that eager to have their vehicles converted anyway, since in Germany many motorists are unwilling to modify their cars beyond what is approved by the manufacturer. And last but not least, many cars are new models featuring direct petrol injection, with not that many conversion systems available. Refueling infrastructure is already there (with 7000 stations offering autogas, Germany is ahead of neighbouring Poland in this respect!), so giving up on LPG as motor fuel would be a huge waste.
Situation is very much different in Turkey, where as much as 40% of all passenger cars are converted to run on LPG, a proportion nowhere else to be seen. The net number of autogas-powered is also highest in the world, at 4,5 million. The market took off in the late 1990s and saw autogas use rise eightfold between 1999 and 2016. And even though there are first signs of saturation and slowing down visible (with diesel-powered cars gaining popularity, especially among taxi drivers), there are still approx. 300 thousand conversions per year.
This shouldn't be surprising, since autogas is priced at roughly one third of the price of petrol. Due to its popularity, it is very widely available – out of 13 thousand fuel stations across the country overall, as many as 10 thousand offer LPG. Also, approved and certified installers can join a special club, which gives motorists willing to have their cars converted confidence that the job will be done properly. On top of it all, even despite autogas' vast popularity, there are media campaigns further promoting use of the fuel to ensure lasting interest among drivers.
Last, but not least, we asked Kristen Mueller of Argus Consulting about a more general view on what can be done to develop an autogas market from scratch and an insight into the US market, which is certainly a promising one.
As you can see, autogas markets can be very different. Hopefully the 2018 LPG – Exceptional Energy conference will be an opportunity to share only good news related to the fuel, perhaps with information of other markets in Europe and beyond growing rapidly. There's definitely much potential in the US, Asia and Africa, so generally speaking autogas is definitely here to stay. Let's keep it that way!
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