Fleet News

LPG firms in final green fuel tax call

A MAJOR consultation to decide the future of alternative fuels ended yesterday with a final bid by the liquefied petroleum gas (LPG) industry to guarantee Government support.

The Department for Transport and the Treasury asked key influencers in June to have their say on plans to overhaul its policy towards fuels including LPG.

Currently, fuel duty discounts mean LPG is half the price of petrol or diesel, while Government schemes subsidise the extra cost of gas-powered vehicles and reduce their company car tax liability. Critics claim the fuel should be treated in line with other fuels, such as biodiesel.

Government officials asked nine key questions to assess the environmental benefits of each fuel and the support it has in the industry, including views on the relative advantages of LPG and compressed natural gas (CNG) against petrol and diesel.

This week, the LPG Association revealed what it hopes will be a knock-out blow to critics of the fuel with results of a E400,000 Europe-wide research programme showing gas-powered vehicles are significantly cleaner than rival fuels. It added that Ford, MG Rover, Vauxhall and Volvo had all confirmed their ability to develop improved autogas vehicles, given the right economic conditions. Moving from bi-fuel vehicles – effectively adapted petrol vehicles that can also run on LPG – to monofuel running on only LPG, there could be a further 10% reduction in emissions and a 60% cut in production costs, it claimed.

Andrew Ford, part of the submission team, said the LPG industry would improve aftermarket conversion standards and increase the refuelling network – currently 1,300 sites, used by 100,000 vehicles in Britain – in return for long-term subsidies on fuel duty, guaranteed for at least five years.

It is also calling for the 1% benefit-in-kind tax discount for gas-powered vehicles to be tripled to 3%.

He added: 'The total cost of the investment by vehicle suppliers, fuel companies and consumers to date in alternative fuels is more than £250 million. Given continued support, the industry looks forward to the future with confidence in its ability to deliver continued environmental and economic benefits for the UK.'

A decision on future treatment of alternative fuels is likely to be announced during the Chancellor of the Exchequer's pre-Budget statement in November.

  • To view the consultation document, log on to www.roads.dft.gov.uk/consult/fuelgases/index.htm.
  • To view the LPGA submission, log on to www.lpga.co.uk.

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