In his November pre-Budget speech chancellor Gordon Brown said LPG did not warrant the current level of duty incentive on the basis of its green credentials. The increase will not be confirmed until the Budget in April.
But Mike Chapman, automotive administrator for the LP Gas Association said the level of increase was “the question people will ask if they are thinking of buying an LPG car”.
He pointed out that although the government had pledged to introduce the LPG duty rise gradually, the delay in supplying details had resulted in “continued uncertainty”.
However, Chapman stressed that, as well as its environmental benefits, LPG would still offer significant savings over petrol and diesel.
The government’s three-year rolling programme for alternative fuel duty would provide stability, he said, and give consumers the certainty they were looking for in terms of duty differentials.
He claimed that the government was still committed to LPG technology and did not want “to pull the rug from under the industry” – one in which gas companies and car manufacturers have invested significantly.
Despite the forthcoming duty rise, he claimed it would still be “viable for consumers to purchase LPG vehicles”.
But the Association of Car Fleet Operators (ACFO) said the LPG lobby had “lost the debate” over the feasibility of the gas as an environmentally friendly alternative to mainstream fuels.
ACFO said the government’s decision to increase fuel duty on LPG in the 2004 Budget would stop sharp the adoption of LPG by fleets.
The SMMT added that the phasing out of the duty incentive for LPG would create difficulties for the businesses that had invested in bringing the fuel’s technologies to the market.