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Thursday, April 5, 2012

Is the Autogas advantage dead?

A few years ago, gas prices were skyrocketing uncontrollably and it lead some people to switch to liquified petroleum gas (LPG) or autogas.  Most of the taxis plying in Cebu use autogas. The increase in patronage to LPG lead to the opening of more gas stations and somehow many car owners were able to save some money as it was 30-50% cheaper than the regular unleaded gasoline. It is even way cheaper than diesel.

Last month though, the prices of autogas was higher than diesel. It was the first time ever that its prices were higher than diesel.  I was so stunned that I needed to take picture of it.  the prices decreased by 5 pesos last week as world prices for LPG has stabilized. Still, the prices are not as low as before.

In Manila, many taxis have switched back to gasoline and the drivers told me that it was for health reasons. Drivers noticed that they get thirsty more when driving a converted taxi and they feel that their health is sort of at risk by driving an LPG powered car.

In Cebu, LPG is still the king for taxis. Diesel taxis are slowly introduced when Hyundai accent was launched in the market. With the surge last month, I am sure that it made many taxi operators think what should be done to improve their situation.

Is the LPG advantage dead? Not yet but its price benefit is slowly being eroded. Before, LPG was seemingly immune to the gas price increase. Now, we are the mercy of the world market and the gas stations. I cannot still figure out why the prices of LPG in Manila is 34 pesos a liter while in Cebu, it is around 42. Maybe the LPG advantage is dead outside Manila. ;)