Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

The government has consistently stated that petrol prices—which I must say I am pleased to see are easing in the marketplace—are very much a function of international crude oil prices and no government in the Western world has a lever to flick to ease that sort of pressure, but we have said that we will do what we can at the margin. I am very pleased with the LPG initiative that we announced. It was a fairly substantial commitment on the government’s part to seek to stimulate an alternative source of energy. That is what we are seeking to do. We understand that petrol and diesel are likely to remain the primary sources of transport fuels for some time to come but that we should seek to responsibly encourage a diversity of sources of fuels to the best of our ability. We have done that, as Senator Allison would know, for ethanol and biodiesel and, with the significant encouragement of our colleagues in the National Party, that has been a key part of our diversification strategy. But we have also sought, as she knows, to encourage greater use of LPG. The demand for participation in the government’s scheme has been overwhelming and we are very pleased with that.

As to compressed natural gas, we do understand and accept the interest of the Democrats in that as an alternative fuel. Certainly, it has some potential. There are a few things that should be noted, however, with respect to it. I note that it is currently excise free but that it does have a lower energy content than petrol or diesel and, as a transport fuel, there are some difficulties with it. CNG, and indeed LNG, are stored at considerably higher pressures. They require specialised heavy-duty storage tanks in vehicles, which affects the amount of fuel that a vehicle can carry and its operating range. Specialist refuelling facilities are required to handle both of those fuels. We provide assistance to operators and manufacturers of heavy commercial vehicles and buses, which are the more appropriate vehicles for this sort of fuel, and there is an alternative fuels conversion program run through my colleague Senator Ian Campbell’s portfolio to assist those sorts of vehicles in making the transition to CNG. But, for the reasons I outlined, it is not necessarily a relevant fuel for ordinary motorists.

LPG is a relevant fuel for ordinary motorists and that is why we have initiated this conversion scheme. We are pleased with the take-up of that and we continue to promote alternative fuels like biodiesel and ethanol. As I have said in this place repeatedly, I think that the hybrid market is going well, there is potential for electric vehicles and that, well down the track, hydrogen is likely to be a significant and widespread transport fuel of the future.