Skip to Main Content


A Review of the Liquefied Petroleum Gas Board
November 2005

FOLLOW-UP (PDF)     REPORT (PDF)    

Members of the General Assembly requested that the Legislative Audit Council review the Liquefied Petroleum (LP) Gas Board to determine whether the current system of regulation for liquid petroleum gas serves the public interest without limiting competition or impeding commerce.

We found that liquefied petroleum gas should be regulated because it is a hazardous substance that is highly flammable. However, the statutory requirements for LP gas dealers to maintain minimum storage capacities could limit competition and impede commerce. There are several reasons why we recommend that requirements for minimum storage be repealed:

  • Based on a S.C. Attorney General’s opinion, storage requirements could be unconstitutional.
  • The absence of the storage requirements would not result in significant harm to consumers.
  • The statute requires storage capacity, but it does not require dealers to keep a specific amount of LP gas on hand at any given time.
  • Federal Trade Commission officials stated that storage requirements could have a negative effect on smaller competitors in the LP gas industry.
  • Zoning restrictions sometimes prohibit new storage facilities.

Also, we found evidence that board members have shown anticompetitive behavior in the course of their duties. Most other states we contacted did not have a board to regulate LP gas; instead, an agency was responsible for LP gas regulation. The S.C. state fire marshal’s office regulates other hazardous materials and should administer LP gas regulations.

In related areas, we found that the LP Gas Board exceeded its statutory authority when it created a new licensing category. Beginning in 2003, the board granted modified dealers licenses to some companies and has developed a test for this category. There is nothing in the current statute which grants authority to the board to create new license categories. Also, tests for licensees of the LP gas board do not meet professional testing standards. A continuing education and training program created by the National Propane Gas Association (NPGA) could be used instead of the current program.