Natural Gas – Conversions, Vehicles and Technology

Pa. Governor Reverses LNG Tax Increase

March 11, 2015

Pennsylvania's Gov. Tom Wolf has reversed a decision made in late 2014 to increase the state tax on liquefied natural gas (LNG), announced Eileen McNulty, acting secretary of the state’s Department of Revenue.

"One of my goals is to promote and develop a comprehensive energy portfolio for Pennsylvania that supports clean energy alternatives to imported petroleum," Wolf said in a release. "Liquefied natural gas is not only a cleaner alternative to diesel, generating lower pollutant emissions when used to fuel vehicles, but it’s also produced here in Pennsylvania from abundant natural gas reserves."

Pennsylvania law defines LNG as an alternative fuel that should be taxed based on its energy potential as compared to gasoline, and the Department of Revenue has historically taxed LNG using a cents-per-gallon basis indexed to gasoline.

The decision late last year to apply the higher diesel tax to LNG effectively increased the fuel’s state tax by 4.3 cents per gallon, according to the Department of Revenue.

The reversal of the LNG tax increase will be effective retroactively to Jan. 1, 2015, the date the increase took effect.

"Given the immediate environmental benefits of fueling trucks with LNG and the future economic gains that will come from further development of the alternative fuels industry in Pennsylvania, it makes no sense to discourage LNG consumption by taxing it at a higher rate," he added.

For 2015, gasoline has a state tax of 50.5 cents per gallon, while diesel is taxed at 64.2 cents per gallon.

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