Fuel for thought

Choking on emission taxes, congestion charges and fascistic parking regimes, Britain’s drivers have never had it so bad. Couple that with rising fuel prices, the vice-like grip of manufacturers on prices and soaring insurance costs, then you could be forgiven for thinking that war had been declared on motorists.

The question is, how does all this leave the company car driver. What for so long was considered a perk of the job is, for many, slowly turning into a burden.

Recent tax changes mean you could pay up to 35% of the list price of your company vehicle in tax and with the payment based on CO2 emissions, the days of luxury petrol-hungry cars for management seem to be numbered. It’s enough to wipe the smiles off both Papa and Nicole’s faces.

Vehicles with a CO2 emission of 165g/km are subject to a 15% tax with each 5g/km rise the tax rises by 1%. Diesels carry a 3% levy on top of these rates. Multiply the car’s list price by the percentage tax and multiply that figure by the employees income tax level and the resultant figure is the tax due.While the fastest-growing sector within the fleet finance market is the structured ECO schemes – where drivers technically own their cars and avoid paying tax – many are now simply offering cash alternatives to employees.

Pressure on business to protect the environment is also weighing heavily on the shoulders of fleet managers – but here there is some good news. UK tax breaks have made liquid petroleum gas a cost-effective and green solution.

If the only fuel used by the car is LPG, there is a discount of 1% plus a further 1% for every 20 g/km the car’s CO2 emission level is below that year’s threshold. For hybrid cars (petrol/electric) there is a discount of 2% plus 1% for every 20g/km the CO2 emission level is below the threshold for that year.

Furthermore, as LPG is half the cost of conventional petrol or diesel, the emissions are less harmful and just about any normal car can be converted to run on gas – the conversion is quick and costs roughly £1400.

Globally, many are reaping the benefits of the new fuel. Italy currently has over one million LPG vehicles on the road. In the Netherlands, North America and Mexico there are around half a million in each country and growing. Japan is currently the world’s greatest consumer of LPG with over 1,800,000 tonnes a year – the new fuel powers over 90% of all taxis in Japan.

In Britain the number is only at 50,000 and there are currently about 1100 LPG sites in UK forecourts.

To boost the LPG cause, the government is lending a helping hand to motorists with the cost of converting to gas. Grants of up to 70% of the cost of engine modification are available under the Powershift initiative.

So far, LPG has been largely restricted to big companies that have their own central refuelling depots for their fleet vehicles. That is likely to change soon as the savings can be astronomical.

While tax on petrol increases yearly, LPG duty has fallen 73% in the past seven years and the Treasury has pledged a three-year tax freeze on gas. Companies can save up to 40% on running costs by using LPG.

On a typical dual-fuel vehicle doing 25,000 miles, that works out to an annual saving of about £1,400. And the introduction of congestion charging in London provides further incentive to adopt gas powered vehicles given the charge-exempt status of the cleanest versions.

Lately, motor manufacturers have been won over by the LPG argument. Vauxhall, Volvo and Ford either already produce or are planning factory-ready dual-fuel models.

The clean vehicles market is on target for a long-awaited boom and sales are expected to hit £1bn this year.

The Queen has also given the royal seal of approval to clean vehicles with her fleet of Rolls Royces running on LPG, and many ambulances, police vehicles and buses are switching. Other well-known clean vehicles companies include DHL and the AA.

Even deputy prime minister John Prescott now drives a specially converted Jaguar Sovereign and he announced early this year that it will become policy for all ministerial cars to be able to run on LPG as well as petrol.

Is it safe?
LPG is stored in the vehicle in liquid form and contained in a substantial cylinder. Crash tests have shown that gas powered vehicles are extremely safe as LPG is more difficult to ignite than any other fuels. To fit the new liquid petroleum gas (LPG) storage tank and vapouriser, and set up your vehicle to run on dual fuels will take around one day.

What are the savings?
LPG on the forecourt costs slightly less than half the price of petrol. A vehicle running on LPG will return slightly less miles per gallon than running on petrol. Hence the cost of running a vehicle on gas will be half that than running it on petrol.

Where can I fill up?
The network of filling stations able to supply LPG is rapidly expanding ? currently at 1100.

What are the tax benefits?As part of EU legislation the Government is reinforcing its support of clean fuel. Cars powered by a combination of petrol and gas qualify for these discounts and may in future allow for larger discounts to reduce the charge below the usual minimum of 15% of the car’s value. Road fund licence levels are currently being reduced for small engine cars and it is expected that gas powered cars’ low emissions will qualify them for discount so further increasing savings.

Will the vehicle lose performance?
With a properly installed LPG conversion and correct engine tuning there will be no noticeable loss of performance when running on gas.

What about the environment?
Carbon monoxide emissions are around 80% less than petrol and 40% less than diesel.

Hydrocarbon emissions are around 60% less than petrol and 50% less than diesel.Nitrous oxide emissions are around 80% less than petrol and 90% less than diesel.

Particulates (PM10s) are non existent in LPG. Carbon dioxide, which contributes to smog and global warming, is lower in LPG.

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