Budget boost for gas
Page 18
If you've noticed an error in this article please click here to report it so we can fix it.
by Charles Young III Supporters of gas as an alternative fuel welcomed last week's Budget, in which the price gap between diesel and compressed natural gas (CNG) widened thanks to a 4p/lit diesel tax hike.
CNG is now 15.3p/lit cheaper than diesel, with an average diesel price of 64p/lit and a CNG equivalent of 48.7p/lit.
There were no further concessions for CNG, but Chancellor Gordon Brown did renew the Conservative commitment to a £500 annual VED cut for trucks fitted with particulate traps. Gas vehicles should qualify for this.
BOC Distribution's chief transport engineer, Sam de Beaux, says: "Last year I said if we had a further 15% reduction (in CNG duty) we would be commercially viable. We are almost there, and after the next Budget we will probably be able to run it without a penalty.
"However, we still have the highest tax in Europe," he adds. "There's still a natural resistance to change so hauliers need a real incentive. The Government needs to kickstart the industry—at the moment it wouldn't cost them much as there simply aren't that many people using it. As the market begins to grow they could then reintroduce the duty."
General manager for British Gas NGV, Tom Gorman, says: "We didn't expect there to be any reduction in gas duty this time round as the new Government has been concentrating on other issues. But there is clear recognition within Labour of the benefits of gas and we are hopeful of a further reduction next time."
E A CNG engine uses around 15% more fuel than a diesel but because of the price differential fuel bills are still lower. The main obstacles come from a lack of refuelling points, a capital cost premium of about £20,000, and uncertainty over residual prices.