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Propane Autogas: Protect the Alternative-Fuel Tax Credits

Two important tax credits for propane, the alternative-fuel vehicle refueling infrastructure credit and the excise tax credit, are set to expire at the end of this year. This is no surprise, but it is important for us to highlight why keeping the credits is such a benefit for consumers and the propane autogas market.

Propane autogas is on a roll. It is a domestically produced, clean-burning fuel, with low upfront costs for customers to convert and with short payback terms. While the autogas industry is small compared to the one for gasoline powered vehicles, there is vast opportunity for growth. The tax credits, if they are extended, will help autogas continue to make strides and grow market share, while saving customers money: on average ~$1/gallon before tax credits.

In a recent article, ICF analyst Michael Sloan said: “Because it’s a very small market right now, there’s not a lot of infrastructure and a relatively limited number of vehicles available for both natural gas and propane, which means that the buyers are not really aware yet of what the economic advantages for the fuel for transportation could be.” In other words, we need time to continue to grow. The choppy nature of tax breaks and extensions is not good for any industry, autogas included.

To keep up momentum the National Propane Gas Association is working towards a multiyear extension of the tax breaks. The association also wants to get the word out on propane: “Our goal in propane being viewed similar to natural gas is for consumers to know that propane can power the same applications that natural gas can,” said the NPGA’s spokeswoman Mollie K. O’Dell in a recent article on this issue. Propane continues to find new applications (school buses, commercial fleets, lawn movers) and an extension of the alternative-fuel tax credits would lengthen the runway to get the word out.

We will continue to keep you posted on the tax credit debate, and in the meantime will keep on extolling why autogas is good for customers and their fleets. Please contact us here if you are interested in learning more about AmeriGas AutoGas.

 

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