Propane a benefactor of excise tax equalization
President Obama signed a bill that includes a provision equalizing excise tax rates for LP gas, liquefied natural gas and compressed natural gas. The section was part of H.R. 3236, a bill that was primarily developed to extend federal highway funds into October.
According to the National Propane Gas Association (NPGA), the equalization bases the calculation for the excise tax levied against propane used as a motor fuel on energy content rather than volume.
NPGA says the action will result in lower excise taxes levied on propane used as a motor fuel because it has a lower energy content than gasoline. The reduction takes effect Jan. 1, 2016.
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About the Author: Kevin Yanik
Kevin Yanik was a senior editor at LP Gas Magazine.
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This is encouraging news for AutoGas customers and potential clients. An additional 5k annually for a 100k gallon per year consumer, based off the current price for propane now. If the 50 cent-a-gallon Alt Fuel Tax credit is renewed, and it looks like that is going to happen… we are talking about 55 cents a gallon in additional savings to the end user. As propane companies switch and trade forklift customers in major cities, the future of propane is in AutoGas for exponential growth. The future is not about trading forklift accounts and being the “cheapest” price in town, it’s about creating new revenue streams through AutoGas and growing new vertical markets.
This good news provides propane providers an additional selling tool to help convince the doubters that propane is a “here and now” solution. January 1st is beginning to look more promising!