LPG is not really much used in ordinary cars in Norway. However, more and more buses use it. Not so much because of the cost, more because it burns cleaner than diesel and thus is better for the environment locally.
 
The gasoline prices are in fact subject to much complaining in Norway - especially because a fairly big part of the price is taxes. Today, a liter costs a little less than 2€, of which about half is tax. Since the price was less than 1,5€/ltr a few years ago, and the general price level has not gone up nearly as much, many think the tax should be relieved a little, to compensate for the higher oil price (especially since the higher oil price means more money to the Norwegian state anyway). Especially the more populistic among our dear politicians are keen to relieve the fuel taxes.
 
However, for most people it is not a big concern. If you compensate for the average income, the fuel prices in Norway are pretty much the same as in the rest of Western Europe.