Fleet News

Fleet Panel: The great gas debate

A REMARKABLE proportion of fleet executives see a viable future for liquefied petroleum gas-powered cars and vans on their fleets.

The slow-burn development of the LPG refuelling infrastructure has now started to reach critical mass at about 1,000 filling stations nationwide, and a significant number of Fleet News Fleet Panel members now have offices in reasonably close proximity to LPG pumps.

The first converts to the alternative fuel appear to be depot-based van fleets with the capacity to operate their own refuelling, although a growing number of organisations have now introduced gas-powered cars on to their choice lists.

These bi-fuel cars still have their work cut out to convince company car drivers of their appeal, although the prospect of 'half price' private motoring has a definite allure to drivers who could cut their fuel bills from 74.8 pence per litre to 36.4ppl.

And the cost saving benefits extend further, with bi-fuel cars enjoying advantageous benefit-in-kind tax treatment. From April, bi-fuel cars supplied directly by a manufacturer will be taxed on their full list price, based on their carbon dioxide emissions when running on gas (typically a lower emission than when running on petrol).

They will also benefit from a one percentage point discount, plus an additional 1% for each 20g/km that their CO2 emissions figure is below the qualifying level for the minimum charge for the year. For example, a car that emits 145g/km of CO2 when running on gas will be taxed at 15% of its list price, plus a 1% discount for being bi-fuel and a 1% discount because its emissions are 20g/km below the minimum 165g/km for the 2002/03 tax year. As a result, the driver will face a benefit charge of 13%.

The tax charge for cars with an aftermarket conversion to run on gas will be based on the price of the original petrol model (ignoring any conversion cost), and the petrol CO2 emissions. But there will be a further 1% discount. So a converted car that emits 165g/km of CO2 will be taxed at 15% of its list price, plus a 1% discount, creating a benefit charge of 14%.

The downside of the gas conversion identified by many of the Fleet Panel members, is the loss of boot space if the gas tank occupies the spare wheel well. In these circumstances the driver is forced either to carry the spare wheel in the boot, reducing load space, or to risk driving without a spare.

Fleet Panel members who see a future for LPG now believe more manufacturers should offer bi-fuel models to improve driver choice.

But one panel member suggests LPG has already 'missed the boat' caught by electric hybrid and fuel cell vehicles, while another suggests the Government will have increased the duty on gas by the time his fleet has covered the requisite miles to recoup the cost of conversion.

##Yes 44--left## ##No 56--right##

'Do you see any application for liquefied petroleum gas cars and vans on your fleet?'

'Yes. I have 28 LPG conversions. The fuel savings are huge, and particularly with PTS vehicles, the engines are much quieter than previous diesel models.'
Mike Rowney, East Kent Hospitals NHS Trust

'Yes, subject to the following: wider range of manufacturer fitted systems; reduction in cost (mitigated if PowerShift grants available - not easy to claim/limited vehicle listing); wider and better advertised LPG stations; Eurotunnel allowing LPG vehicles.'
Ian Smith, group accountant, CPiO Ltd

'No. The availability of LPG at ordinary fuel stations is still inadequate, tax benefits are minimal and who really wants to drive around without a spare wheel? I think LPG has 'missed the boat' and the future will be with petrol/electric hybrids.'
Alan Miles, administration and data protection manager, RNIB

'Yes. We operate a totally user-chooser fleet. After a two-year evaluation, we introduced manufacturer dual-fuel models to our choice list mid-2001. So far we have had two cars delivered. Now the number of LPG outlets has expanded I expect the appeal to grow, particularly for high private mileage drivers.'
Phil Redman, manager fleet management and forms & print departments, IBM

'Hopefully, yes. We are monitoring LPG panel vans and we are encouraged by results and with the enthusiasm of drivers, who are obliged to reimburse the cost of their private motoring. Disappointingly, even though we would like to experiment similarly with small LPG cars (e.g. Fiesta size), to date we are unaware of any manufacturer who produces such vehicles. We are limited to evaluating the efficiency of diesel models only.'
Chris Fitzpatrick, area fleet coordinator, Telewest Broadband

'Yes. Cost-conscious user-choosers would be daft not to at least consider it. With reduced emissions and cheap LPG it makes all sorts of sense. However, fleets will not go through the hassle of conversion, which means you are stuck with the present 'dual-fuel' options on offer. While these are not exactly awe-inspiring, full marks to Vauxhall for effort. I might well be our first LPG driver by June.'
Steve Skelly, Rowley Ashworth Solicitors

'No. I understand that, from a fuel economy point of view, LPG is not as good as diesel or unleaded petrol. The cost savings are purely from taxation and I do not trust any Government not to increase these significantly should there be a marked switch from petrol/ diesel. The other, and probably more significant point, is the number of outlets from which the fuel may be purchased. We have quite a few engineers in the north of England and outlets seem sparse in that area. Our attitude may change when:

  • More manufacturers produce vehicles powered by LPG
  • More outlets are available.'
    Richard Warner, company secretary, Seco Tools

    'No, not really. There are not many filling stations selling it in our area and the space the tank takes up is a major drawback.'
    Tony Cock, financial director, British & Brazilian Produce Co

    'No for cars, as there does not seem to be either enough filling stations nor adequate choice of vehicles. Yes for vans, but residuals are rubbish and filling stations are rare. We have obtained quotes for the installation of bunkered fuel, but it looks a bit expensive.'
    D.M, via email

    'No. At present there are very few stations in our area where you can purchase LPG. Maybe in years to come when more stations stock LPG it will be time to re-consider.'
    Paul Trup, Argonaut Games

    'APU was the first UK university to adopt LPG for its pool car fleet in August 2001 and early indications are very favourable. Two county councils have partnered with us to help with bunkered fuel dispensing. We would seriously consider vans and have recently added some electric vehicles.'
    Chris Hackett, Anglia Polytechnic University

    'Yes. I have introduced LPG cars to my fleet. However, I have problems with acceptability due to the boot size.'
    Diane Miller, fleet manager, Milgo Solutions

    'No. Availability is still an issue. Drivers of 'perk' cars do not have the incentive to choose LPG as the tax position is not substantially different to a low CO2 vehicle and there is an issue over boot space or the loss of the spare wheel. Unless the Government creates a meaningful tax advantage and the fuel becomes readily available, I can't see it really taking off.'
    David Mullins, Slough Estates

    'We have no requirement for LPG although our local filling station has an LPG tank. We thought about converting a Toyota RAV but with no financial support (it was bought secondhand), it was not viable.'
    Malcolm Dungworth, via email

    'Yes. There is a definite place for LPG within our fleet and I have been pressing for the introduction of this type of fuel. However, there is a perception that gas-powered cars are still the poor relation in terms of the company car 'perk', and I consider that manufacturers and employers could do more by making the LPG-fuelled car more available for demonstration. For a number of reasons, the push at the moment within our fleet is for diesel, but this is coming from the tax-conscious driver, not the employer. This is because we are currently investigating other more cost-efficient and tax-effective ways of providing our drivers with vehicles.'
    Chris Bates, facilities manager, Lafarge Aggregates

    'Yes. We have LPG/dual-fuel vans within the commercial fleet and have installed our own LPG fuel storage tanks.'
    P.M. (public sector fleet manager). Details supplied

    'No. By the time my fleet has done sufficient mileage to cover the initial outlay, I am sure the Government will impose a new LPG fuel tax to counterbalance the benefits, so why bother?'
    Name and address supplied

    'Yes. We are rolling out a programme across our commercial fleet and encourage LPG cars.
    Carol Green, Transport Co-ordinator, Anglian Water

    'No. The majority of our fleet consists of low mileage ex-rental diesel Ford Escort vans. We completed a feasibility study about six months ago regarding LPG conversions, but with the difficulty in obtaining them and the additional purchase costs of suitable petrol vehicles, we would have been adding to our costs. Out of a 100-vehicle fleet we only operate nine petrol cars and all are 'perk' vehicles. That said we have just purchased an Alfa 156 which had already been converted to LPG so we will be monitoring it closely.
    Paul Featherstone, Churchill Express

  • 55 fleet executives voted on this week's issue. If you would like to join the Fleet Panel, email: jonathan.manning@emap.com
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