What is the incentive for a buyer to purchase a car for business purposes which runs on Liquefied Petroleum Gas (LPG); and why has the price of LPG not come down given the falling price of petrol.

The vehicle purchase decisions of businesses are commercial matters and should ultimately depend on the requirements of the business. The Government does not provide any specific incentives for business purchases of LPG vehicles. These vehicles receive the same treatment as petrol or diesel run vehicles, including being able to claim input tax credits for GST paid on the vehicle and the fuel.

Movements in retail LPG and petrol prices in Australia follow different international benchmarks. The international benchmark for automotive LPG is based on the Saudi Aramco Contract Price (Saudi CP), whereas the benchmark price for regular unleaded petrol in Australia is the Singapore Mogas 95. Although the Saudi CP has fallen significantly in US dollar terms over recent months, in Australian dollar terms, it has decreased by less due to a weaker exchange rate. This has impacted on automotive LPG prices at the retail level.