§ Mr. HancockTo ask the Chancellor of the Exchequer what tax incentives exist to encourage the use of propane as a vehicle fuel; if he will extend tax incentives to encourage propane use; and if he will make a statement. [45128]
§ Dawn PrimaroloThis year the duty on road fuel gases (liquefied petroleum gas (propane) and liquefied natural gas (methane)) has been frozen for the second Budget in succession. This has increased the differential in favour of road fuel gases in recognition of their environmental benefit and more than fulfilled the pledge to maintain the duty differential with more conventional fuels for the lifetime of this Parliament.
Duty rates on the main road fuels are now as follows:
- Road fuel gas: 21.13 pence per kg (approximately 2 litres)
- Ultra low sulphur diesel: 42.99 pence per litre
- Unleaded petrol: 43.99 pence per litre
- Conventional diesel: 44.99 pence per litre
- Super unleaded petrol: 48.76 pence per litre.
The widened duty differential with conventional fuels offers a clear incentive for high mileage fleets, vans and buses to convert to cleaner gas power and will help offset the cost to motorists of vehicle conversion. As a further incentive to use road fuel gas, the cost of converting a vehicle to run on gas will not be taken into account when calculating any income tax car benefit change.