LNG to Meet More U.S. Fleet Needs with Tax Fix

Why are some U.S. fleets eager for winter? This summer’s big news for liquefied natural gas (LNG) means fleets running on the fuel will benefit beginning this winter. A new law in the United States was enacted to bring LNG excise taxes measured in line with diesel on an energy basis – using diesel gallon equivalents (DGE). The new law will effect January 1, 2016.

Instead of being charged tax by volume as has been in the past, LNG will be taxed on its energy equivalent relative to diesel. Based on the high-fuel-use applications that LNG most benefits, which compete mainly with diesel fuel, this creates more easily equalized comparisons for fleet operators, as well as the tax benefits.