In a “dueling banjos” of fuel pricing, a recent story from the Connecticut Post has sparked a debate over the price differential between propane autogas and gasoline.
The showdown started over the weekend, when a story by the Post looked at propane’s exclusion from the Nat Gas bill currently before Congress. It included this line: “Currently, propane-fueled vehicles in the U.S. pay $1.25 less per gallon than they would for gasoline.” That stat, reporter Vinti Singh later wrote on the paper’s news blog, came from the president of Alliance Autogas, Stuart Weidie.
The Independent Connecticut Petroleum Association (ICPA) saw that, and suspected some bad math. The group’s president sent an e-mail to the story’s reporter, arguing that a gallon of propane could sell for as much as $4.82 in Connecticut. Gene Guilford noted that a gallon of propane retailed for $3.14 in the state. And from there, he reasoned that:
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 [that is: $3.14 + .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. [Note: $3.98 + 0.65= $4.63. But that was the quote.]
Which would make gasoline — currently averaging $3.97 a gallon in Connecticut — the much cheaper choice between the two. But wait. Weidie shot back:
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.
Weidie then offered up several side-by-side examples of gas and autogas rates (though none from Connecticut) which put the propane fuel around a $1.25 cheaper than gas. And even more if a 50-cent-per-gallon tax credit is added in. “The average price of autogas per gasoline-gallon-equivalent is $1.69 less,” Weidie writes.
Then some serious mathematics ensue, teasing out the particulars.
Have a look at the blog post here. And read the original Connecticut Post story from Sunday here.