The manufacturer blames a lack of direction from the Government and claims it is now being forced to wait until the next tax year before it can push ahead with future developments.
Chancellor of the Exchequer Gordon Brown said in his pre-Budget Report last year that the duty discount now enjoyed by LPG, which makes it about half the price of petrol, was no longer justified by the environmental benefits.
Vauxhall's consternation emerged as it announced record sales last year of its Dualfuel vehicles, which reached 4,084 units.
Ian Blinder, manager for special vehicles at Vauxhall, said: 'Ambiguities regarding the level of duty increase mean that our customers' ability to make informed decisions on their choice of vehicles is being hampered. This means that Vauxhall is having difficulties planning any new LPG developments until the tax details are revealed in the next Budget.'
Vauxhall says its 73% increase in Dualfuel sales last year, compared to 2002, beat its own forecast by more than 30%. It is now urging the Government to announce a solid taxation plan for LPG in a bid to quash insecurities over the market.
Blinder added: 'We hope the Government will continue to incentivise drivers and companies to look at alternative fuels, such as LPG, as a key element within their environmental strategy. The market can not continue in this state of flux and so we urge the Government to give an early indication of its taxation strategy in this area.'
In his pre-Budget statement, Brown said: 'We will gradually increase the duty rate for LPG over the next three years, setting duty differentials on a path towards a level commensurate with the fuel's environmental benefits. Future differentials for the next three years will be announced in Budget 2004.'