‘Common-Sense Change Will Mean Even Greater Savings’ on Fuel,
Measure Enacted as Part of Broad Federal Highway Spending Bill
The U.S. Congress has passed legislation requiring that liquefied natural gas be taxed on a diesel gallon equivalent basis, putting it on an equal footing, energy-wise, with diesel.
The item was initially posted on July 30
The language in a federal highway funding bill “corrects a longstanding inequity,” NGVAmerica said today, “and will further expand the use of clean-burning domestic natural gas as a transportation fuel.”
“Anyone who cares about a cleaner environment and energy independence should be very grateful for what the U.S. Congress did this week,” Clean Energy Fuels president and CEO said in a release.
President Obama signed the bill into law on Friday, July 31. It takes effect on January 1.
Currently, the association says, fleets operating LNG-powered trucks are effectively taxed for their fuel at a rate 70% higher than that of diesel fuel – “an unfair penalty.” The new law modifies the highway excise tax on LNG to be based on energy content, rather than volume, and thus brings the tax on LNG into parity with that of diesel.
“Passage of this legislation is great news for trucking fleets who are looking to clean-burning LNG to power their transportation needs,” NGVAmerica president Matt Godlewski said in his organization’s announcement.
“This common-sense change will mean even greater savings on their fuel costs, and it provides a powerful new economic incentive for those fleets considering the switch to this already low-priced, domestic fuel,” Godlewski said.
From 41.3¢ per DGE to 24.3¢
“This fix reduces the excise tax on LNG from approximately 41.3 cents per DGE to 24.3 cents per DGE,” NGVAmerica explains. “A natural gas truck traveling 100,000 miles per year at 5 miles per DGE consumes 20,000 DGE per year.
“Prior to the passage of the new law, the LNG truck would have a highway fuel tax bill of $8,262. With this change, the LNG truck will now pay $4,860 a year in highway fuel taxes, a savings of $3,402 per year.”
NGVAmerica commended U.S. Senators Michael Bennet (D-CO) and Richard Burr (R-NC), and Congressmen Mac Thornberry (R-TX) and Todd Young (R-IN) for seeing the provision through.
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Source: NGVAmerica with Fleets & Fuels follow-up