Does LPG fuel cost more to produce than regular gasoline?

Question

Does LPG fuel cost more to produce than regular gasoline?

Answer 1

LPG (Liquid Petroleum Gas) as used by consumers is generally propane and in some instances, butane.  Both come from gas wells and are simply separated out of the gas stream.  LPG is NOT methane, that is natural gas.  

The price to produce propane and butane is significantly less than the cost to produce gasoline.  The fractionation tower that separates off the butane product also makes 'natural gasoline' that is used as a feed stock as gasoline refineries.  Since it is just a feed stock, it has a whole other set of processes to go through and costs more to make.

Answer 2

The drilling costs are the same.  the property and labor used may be more if drilled domestic.  LPG is not as easy to transport, so there are costs there as well.  LPG is often not taxed like conventional fuels in most states.  That is one of the reasons the cost to the consumer is less.  I have never seen LPG costs exceed the cost of gas.  That could change.  As it stands now, LPG costs much less than gas.

Answer 3

Just gauging from the articles below, I would have to say no.  It retails for 50% less than diesel.   I hope these articles help.  I was unable to locate any information on LPG fuel production costs.

http://www.worldlpg.com/

http://www.shellgaslpg.com/

Answer 4

It comes directly out of gas wells.  LPG stands for Liquefied Petroleum Gas and is mostly methane.  Unlike gasoline it does not have to be "cat" cracked, reformed, distilled and blended before being useful.  So it costs far less to produce and get ready for market.