Propane is one of several combustible gases which are present in varying quantities with methane in natural gas. When extracted from natural gas as a refined fuel, propane is particularly useful because it can be stored under pressure as a liquid at normal atmospheric temperatures. This permits propane tanks to carry higher volumes of fuel at a lower cost than natural gas. This characteristic makes propane a more attractive gaseous fuel for occasional use such as backyard barbecues.

Propane is widely used in Canada as an alternative fuel for motor vehicles. Propane is particularly interesting as an alternative fuel because of its compatibility with existing gasoline engines. Most production vehicles that run on regular gasoline can be refitted to switch back and forth between propane and gasoline at the flip of a switch. In most cases, dual-fuel propane refit systems can be installed in automobiles for about the cost of a new motor. However, as the cost of propane rises closer to the cost of gasoline during periods of heavy demand or high oil prices, propane becomes a less attractive alternative fuel to gasoline. Propane is also unwieldy as a vehicle's only fuel due to its limited availability outside of urban centers in Canada, thus the need for dual-fuel systems to improve the versatility of a propane-powered vehicle.

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