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Pennsylvania reverses LNG tax decision

LNG Industry,

The Governor of Pennsylvania, Tom Wolf, has reversed a decision made in 2014 that increased state tax on LNG.

The decision follows thorough consideration of the environmental and economic development benefits derived from using LNG as a vehicle fuel alternative to diesel.

Cleaner alternative

Commenting on the decision, Wolf said: “One of my goals is to promote and develop a comprehensive energy portfolio for Pennsylvania that supports clean energy alternatives to imported petroleum. [LNG] 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.

"Given the immediate environmental benefits of fuelling 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."

Diesel tax

For 2015, a gallon of gasoline is subject to state tax of 50.5 cents, while diesel is taxed at 64.2 cents per gallon. A policy shift in late 2014, which followed a Department of Energy change in how LNG is measured at the federal level, applied a higher diesel tax to LNG, effectively increasing the state tax on LNG by 4.3 cents per gallon.

The reversal of the tax change for LNG will be effective retroactively to 1 January 2015.

Adapted from press release by Katie Woodward

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