Recently, an overview of the car market in terms of the impact of fuel prices on it was published on the website of the Institute of Car Market Research. However, one topic worthy of a separate study was not included there. In particular, there is a connection between the prices for the liquefied propane-butane mixture, which changed quite a lot last year (and still have not returned to potentially minimal values), and the dynamics of gas cylinder equipment (HBO) installations. After all, the demand for this service may well depend on LPG prices.
HBO installation statistics
The numbers that will be given below refer to official re-registrations by service centers of the Ministry of Internal Affairs of vehicles that were converted to run on two types of fuel — gasoline and gas. So, a total of 37,800 such operations took place during 2023, of which 36,700 were related to passenger cars.
This is because the fleet of trucks or buses with gasoline engines is actually exhausted, in the sense that the installation of HBO is relevant for such vehicles produced more than 15-20 years ago, and most of those in operation have already been converted. More modern vehicles of these groups are mainly equipped with diesel engines, and do not require HBO. The demand for conversion remains mainly for passenger cars, with engines without direct gasoline injection and turbocharging.
Every month, in total, for all types of vehicles last year , from 2,000 (in January) to almost 4,000 (in August-September) conversions for the operation of the engine on a gas mixture took place. With a sharp decrease, to 1.6 thousand in December. The average monthly value for 2023 was 3.1 thousand.
The price of "gas" and the volume of conversions
The best relationship between the price of liquefied gas and the daily number of re-registrations of vehicles for the operation of gas engines can be seen in the diagram. At the beginning of the year, relatively small volumes of HBO installations were observed, then (when the retail prices at petrol stations began to rise) the number of conversions began to increase. And so it continued until November. In fact, the decline in rates began earlier, since between the actual conversion of the car there is still certification and, in fact, re-registration (which is shown in the diagram), which leads to the appearance of a time gap of 1-2 weeks, or even more, if there is a lack of free hours in the Ministry of Internal Affairs to record visitors.
So, based on the above data, the following can be stated: an increase in the retail price of LPG above UAH 30/l leads to a significant decrease in the number of conversions of cars to run their engines on liquefied gas. It is clear that the reason is a significant reduction in savings and an increase in the time required for the payback of the gas plant and the costs of its registration.
What are the forecasts "in the low light"?
Since, as has just been proven, there is a direct relationship between the price of "autogas" and the volume of HBO installations, motorists, as well as market participants who provide services for converting cars to "gas", it is interesting to know what prices can be expected for this type of fuel soon. To find out, we turned to Oleksandr Sirenko, an analyst at the specialized agency NaftoRynok .
Here is the expertʼs direct speech: "After high and record prices in November 2023, the wholesale and retail market went down. According to the national tradition, wholesale sold out instantly (to understand, gas is currently sold at auctions at UAH 36,000/t, or UAH 19.0/l), on the other hand, the dynamics at gas stations are not so crazy: prices stopped at the mark of UAH 26-27/l .
Although, if we take last yearʼs standard markup of 2-3 hryvnias, one could expect 23 hryvnias/l at a gas station. On the other hand, we observe extremely low volumes of gas imports: 1.6 thousand tons per day compared to the average of 3.0 thousand tons per day for normal market operation. The low supply has not yet been reflected in the prices, but everything can change very quickly, and the consumer will not have time to see the price "bottom" on the gas station shelves.
Subscribe to the Telegram channel of the Auto Market Research Institute to be the first to receive information without advertising or spam.
