The industry is asked nine key questions in the document, published by the Department for Transport and the Treasury. It is intended to help the Government assess the environmental benefits of each fuel and the support it has in the industry.
These include views on the relative advantages of liquefied petroleum gas (LPG) and compressed natural gas (CNG) against petrol and diesel, what vehicles and locations would gain most from LPG, whether manufacturers and fuel suppliers should increase availability, how the market might change if Government support continued and how funds can be better linked to 'environmental outcomes'.
The consultation document, called 'Road fuel gases and their contribution to clean low-carbon transport', says the relative benefits from different fuels may change over time as a result of developments in fuel and vehicle technology.
It adds: 'Progressively tougher EU emission standards have made petrol and diesel vehicles increasingly clean, reducing the margin of air quality benefits of gas. Compared to petrol cars meeting Euro IV standards, even the cleanest LPG and natural gas vehicles offer relatively small air quality benefits.
'There does, however, remain an air quality advantage from using gas vehicles in place of diesels, particularly in urban areas. So using gas to replace urban delivery vans, trucks or buses continues to offer useful air quality benefits.'
However, this leaves a sizeable question mark over the future of LPG when used in company cars.
As part of the review, the Government is considering the low duty levels on gaseous fuels which currently mean it is half the price of petrol or diesel at the pump. Industry experts fear that if LPG becomes more expensive at the pump, it could have a huge negative effect on its popularity, particularly as it is 15% less fuel efficient than petrol.
Launching the consultation, Transport Minister David Jamieson backed the present lower duty on the fuel, but gave no hint of future thinking, when he said: 'We have come a long way with LPG. Due to Government support we have tens of thousands of LPG cars on the road and the fuel is now available right across the country. Eight car and van manufacturers now produce LPG models as a showroom option and conversions are available for many more cars.
'This represents major progress in the UK's use of alternatively-fuelled vehicles. However, it is important that Government support for new technologies is targeted to ensure the best environmental benefits and this is what the consultation aims to ensure.'
Philip Selwood, chief executive of the Energy Saving Trust, said: 'We fully support the use of fiscal incentives to kick-start technological developments and promote the early adoption of cleaner and low carbon fuel alternatives.
'Moreover, securing a continued Government commitment is essential to ensure stable market conditions for cleaner and low carbon fuel technologies.'
The Government will announce in its 2003 Pre-Budget Report its proposals for the future taxation, grants and other support for clean fuels. The consultation period ends on September 17.
Key questions for tax consultation