Tom Fiddell, chairman of the LP Gas Association, said although companies had the incentive of a PowerShift grant to offset the cost of converting vehicles to LPG, drivers have to add on the full cost of the P11D price for manufacturer-supplied gas cars.
Company car drivers do, however, enjoy a one point reduction in the percentage used to calculate their company car tax if they select a gas-powered car, and the calculation is made on the emissions when the car is running on gas, not petrol, so the carbon dioxide figure should be lower.
But Fiddell told Fleet News: 'More needs to be done. The decision to freeze duty on LPG was announced at the last Budget when we were told duty would remain the same until 2004.
'The big disappointment was the failure to remove the cost of gas conversions from a car's P11D price. If someone chooses a manufacturer-converted LPG car, although the company can obtain a grant towards the cost of conversion, the company car driver pays benefit in kind tax on the price of the car and the conversion.
'We were hoping the Government would take away the conversion cost from the P11D price, as it is something we have long been lobbying hard for. We are disappointed that the Chancellor did not recognise the environmental advantages of persuading company car drivers to choose LPG. Although there is a 1% discount in place for choosing gas, drivers are still penalised by the extra tax from the conversion cost.'
Volvo – one of the manufacturers that offers LPG converted cars in the showroom – echoed Fiddell's disappointment at the Budget. A spokeswoman said: 'The Government has taken a number of steps to address environmental issues and Volvo welcomes these initiatives, but this year's Budget has not been too favourable. In particular, it is disappointing that there was no further reduction to company car taxation for alternative fuel cars. We feel that this opportunity to encourage 'green' fleets has been missed.'