Is LPG Cheaper Than Natural Gas?

Is LPG Cheaper than Natural Gas – Homeowners Save with LPG

Is LPG cheaper than natural gas? LPG vs natural gas price comparisons show LPG cheaper than natural gas in many cases.

Natural gas is generally cheaper than LPG for the gas itself. However, the natural gas daily supply charge can exceed $400 per year, before any gas is used.

Total cost under $200 per year for LPG vs natural gas price of $539 per year, in one cooking only example.

LPG compared to natural gas has more than double the energy content at 93.2MJ/m³ vs natural gas at 38.7MJ/m³, so LPG is much more efficient than natural gas and is now cheaper in many cases.

Comparing LPG vs natural gas, natural gas price is no longer the presumed low cost option.

Higher natural gas tariffs and daily service charges make LPG the best choice in many situations.

Prices will vary based on the tariffs in your area but LPG vs natural gas price now finds LPG cheaper than natural gas in many situations.

The daily supply charge is a charge that applies for supplying gas to your premises for each day of the billing period, regardless of how much gas you use and can be as high as $1.22 per day¹ or $446 per year and this doesn’t even include the gas.

Add in just the gas for cooking and it totals $539 total annual cost for natural gas. The corresponding LPG cost would be well under $200.

The gas world has been turned upside down with people abandoning natural gas and choosing to go with LPG.

Whilst it may sound pretty implausible, based on old wisdom, the reasoning is simple — they are saving money.

Is LPG Better than Natural Gas

You can see how LPG is better than natural gas when you buy a cooktop.

Cooktops usually come with two sets of gas jets.

The ones for LPG have a much smaller hole and use less gas.

That’s because LPG contains more heat energy, with 93.2MJ/m³ vs natural gas at 38.7MJ/m³ (2572 Btu/ft³ vs 1011 Btu/ft³).

Is LPG Cheaper than Natural Gas or More Expensive

LPG also compares favourably with natural gas cost when you include all of the fees and charges.

When considering LPG vs natural gas price-cost, times have changed and natural gas is no longer the presumed low cost option.

New higher natural gas tariffs, daily supply charge and the average LPG vs natural gas cost-price makes LPG cheaper than natural gas in many situations.

The supply of LPG gas is not more expensive than natural gas.

Many customers now find that it is cheaper to go with LPG.

For some low volume users, the total cost of the LPG is cheaper and may be less than half of the cost of the natural gas, because of the natural gas daily supply charge.

The relative positions of LPG vs natural gas price has changed over time.

Due to exports, natural gas price is now driven upward by the world price for LNG – Liquefied Natural Gas.

The daily supply charge has also gone up. It is a charge that applies for supplying gas to your premises for each day of the billing period, regardless of how much gas you use.

For many years, people switched from LPG to natural gas as soon as it became available on their street.

The old LPG vs natural gas cost assumption was that LPG gas was more expensive than natural gas.

The new truth is that market changes make LPG cheaper than natural gas under numerous circumstances.

With new higher natural gas tariffs, fees and the average LPG vs natural gas cost-price, this may now be a false assumption.

LPG Compared to Natural Gas – LPG vs Mains Gas – Town Gas vs LPG

If you want to compare LPG to natural gas (LPG vs mains gas or town gas vs LPG) cost, energy content is the best way.

MJ are used to express the energy content of gas and are one way that LPG and natural gas cost can be compared.

As an example to use for comparison of LPG vs natural gas cost-price, the energy required for cooking is only 2,000MJ/year, according to IPART — “But gas usage also depends on what it is used for, and households that use gas only for cooking only use about 500 MJ per quarter.”

Megajoules, often expressed as just MJ, are derived units of energy in the International System of Units.

The megajoules per hour (MJ/hr) ratings on appliances actually indicate the gas consumption of the appliance, not the heat output.

The New Reality

Things have changed in the last few years regarding LPG and natural gas prices.

The price of natural gas has been climbing whilst LPG has remained relatively stable. So, LPG can be cheaper than natural gas.

But why?

The Culprit in Many Cases is the “Daily Supply Charge”.

As previously explained, the daily supply charge is a charge that applies for supplying gas to your premises for each day of the billing period, regardless of how much gas you use.

It does not include the gas, which is an additional charge.

For example, in QLD these charges can be as high as $446 per year and this doesn’t even include the gas.

So, on this particular tariff the natural gas cost (for 2,000MJ of gas) works out to an additional $93 for a total annual cost of $539 — and that’s just for cooking.

How Much is Natural Gas

Determining how much is natural gas requires an understanding of the applicable natural gas tariffs and charges.

The price includes the daily supply charge plus the cost of the natural gas itself.

The LPG vs natural gas (LPG vs mains gas) cost can be affected by volume and the season.

One Gas Bottle Can Last Over a Year

There are about 2200MJ in a standard 45kg gas bottle.

The estimated 2000MJ/year needed for cooking is only about 91% of a 45kg LPG gas bottle.

So, one bottle typically lasts more than a year when used just for food preparation.

The LPG service charge (sometimes called rental) for a 45kg gas bottle is typically between $35 and $45 per year, a huge 90% savings compared to a $446 natural gas supply charge.

The cost of the LPG can vary a bit, by location, but it still remains very competitive with the new higher natural gas tariffs.

The bottom line:

The end result is that for modest volume users, like cooking only customers, it is typically less expensive to have LPG.

In fact, the total cost of the LPG for cooking may be less than half of the cost of the natural gas.

Breakeven Volume

Based on this tariff example, a small family would probably be break even on LPG vs natural gas if they had both gas hot water and cooking, based on 10,000MJ per year.

Different tariffs, fees, prices, family sizes and mixes of appliances would lead to various different consumption and cost results.

Cost of Switching to Natural Gas

The cost of switching to natural gas and connecting to the natural gas main can be very expensive and varies from property to property and with the gas distribution network owner.

Cost of switching to natural gas includes actual connection to the main or a mains extension, required service pipe work, the supply and installation of a meter and a pressure regulator.

There may also be excavation and restoration of council foot paths and roads, as well as possible traffic control costs.  Your home’s garden and landscaping may also need to be dug up and subsequently restored.

It gets better:

This is a cost that is virtually avoided with bottled gas.

With LPG, you only need to install a regulator, possibly a changeover valve and the gas pipework on and within your home.

What if Natural Gas Mains are Added to Your Street?

Some homeowners live where gas mains are installed after they already have LPG.

They need to remember that the same costs of connection apply, if they are contemplating LPG vs natural gas cost-price, as on an existing home.

So, even if the monthly cost of natural gas is a bit less, it could take many years to recover the initial connection cost and the cost of converting the appliances.

You might save by doing nothing:

Homes with modest gas consumption may actually be costing even more money over time, with natural gas, based on the previously mentioned fees and tariffs.

Appliances are Not an Issue

Virtually all gas appliances are available in both LPG and natural gas versions.

The cost of the two versions is typically the same, too.

Difference Between LPG and Natural Gas

The difference between LPG and natural gas is that they are different gases with different distribution.

LPG is propane vs natural gas as methane.

Gas bottles are used to supply LPG whilst natural gas is conveyed by pipeline.

There are three main differences in the way that LPG vs natural gas are burnt and weight vs air..

The first difference is in the energy content.

LPG has a higher calorific value, or energy content, so less gas is required to produce the same amount of heat.

The second difference is in the oxygen to gas ratio required for proper combustion.

LPG (propane) requires an oxygen to gas ratio of approximately 25 to 1.

Natural gas (methane) requires a ratio of around 10 to 1.

To achieve this difference, LPG is typically provided in a smaller quantity but at a higher pressure, drawing more oxygen with it into the burner.

The final difference is that natural gas has a safety advantage vs LPG.

As natural gas is lighter than air, in the event of a leak, natural gas will dissipate more quickly.

As LPG (propane) is heavier than air, it may collect in basements or near the floor of a home.

Town Gas vs LPG

Comparing town gas vs LPG,  LPG is more dense (has a higher specific gravity) than town gas.

Town gas (methane) is less dense than air, at a relative density of 0.5537 to 1. LPG (propane) is more dense than air, at a relative density of 1.5219 to 1.

Energy content of LPG vs town gas (93.2MJ/m³ vs 38.7MJ/m³) has LPG with a higher energy content.

Converting LPG and Natural Gas Appliances

Converting gas appliances from natural gas to LPG or vice versa is a common practice.

So, switching back to LPG is not cost prohibitive.

To convert from one gas to another, the two most common alterations are the sizing of the gas injector and the adjustment of pressure.

This isn’t hard:

Conversion kits are typically available from the manufacturers and gas fitters must do the conversions.

Do the Math!

LPG gas is not more expensive than natural gas, LPG is often less expensive.

Many customers now find that it is cheaper to go with LPG vs natural gas.

LPG is now better because it frequently costs less than natural gas.

LPG is better when it comes to availability and portability.

LPG is also better, with a higher energy content.

Finally, LPG is better because you can get it virtually everywhere.

Assuming that you live in an area where natural gas is also available, it pays to do the math before making any decision on the type of gas you use.

Whilst heavy gas users may be better off with natural gas the same is not necessarily true for light to moderate usage.

Homes with modest gas consumption, and especially ones with gas for cooking only, may well be better off with LPG pricing.

You can do something:

If you are experiencing ever increasing natural gas costs, it may be time to do the math.

Find out for yourself why some homeowners are abandoning natural gas for LPG.