Budget 2024: A case for auto LPG as cleaner fuel

At the dawn of the new fiscal year, India stands at a critical juncture— crossroads where environmental health, economic growth, and public well-being intersect. The 2024-25 Budget provides an opportunity for the government to steer our nation toward a cleaner, more sustainable energy future. Among the myriad choices lies a pragmatic solution: Auto LPG.

The Environmental Imperative

Our air quality is deteriorating rapidly, and its impact on public health cannot be overstated. Respiratory diseases, cardiovascular issues, and other health complications related to poor air quality are becoming increasingly common, underscoring the critical need for immediate and decisive government action to promote cleaner mobility solutions. The need for decisive government action to encourage cleaner mobility has never been more urgent. In this context, auto LPG emerges as a promising alternative. As the third most widely used automotive fuel globally, auto LPG is a versatile and environmentally friendly option that has quietly been making significant strides in reducing emissions and improving air quality.

Auto LPG: A Beacon of Hope

Reducing Emissions, Enhancing Air Quality:

Auto LPG stands out as an exceptional fuel. Its emissions of particulates (PM), carbon monoxide (CO), nitrogen oxides (NOx), and hydrocarbons (HC) are significantly lower than those of conventional fuels.

With a Global Warming Potential (GWP) of ‘zero,’ Auto LPG aligns seamlessly with global efforts to combat climate change.

Cost-Effectiveness and Consumer Benefits:

Auto LPG is approximately 40% cheaper than petrol. It offers substantial cost savings for consumers. Encouraging Original Equipment Manufacturers (OEMs) to roll out LPG vehicles at affordable prices will boost consumer demand and accelerate adoption.

GST Reduction: A Game-Changer:

Currently, Auto LPG faces an 18% GST rate, while EVs enjoy heavy subsidies. To provide a level playing field, GST on Auto LPG could be rationalised to 5%. This move will make Auto LPG even more competitively priced, fostering greater adoption. 

A Barrier to Overcome:

Approximately 330 million vehicles in India run on environmentally harmful liquid fuels. Auto LPG presents a compelling alternative, offering environmental, economic, and operational benefits.

The Path Forward

Incentivise OEMs:

Encourage OEMs to produce more LPG variants through consistent incentives. This will expand choices for consumers and enhance public mobility fuel options.

Bridge the GST Gap:

The disparity between Auto LPG (18% GST) and EVs (heavily subsidised) hinders adoption. A reduced GST rate for Auto LPG will catalyse its acceptance.

A Shared Vision:

Let’s envision a cleaner and greener India—one where Auto LPG plays a pivotal role in reducing vehicular emissions. We urge the Finance Ministry to consider our appeal for GST reduction on Auto LPG fuel, and conversion kits, and encourage OE LPG vehicles.

Conclusion

As the budget is about to be announced, we urge the Finance Minister to prioritise cleaner mobility. Auto LPG isn’t just an alternative; it’s a practical solution—one that aligns with our collective vision of a healthier, more sustainable India.

(The author is Director General of Indian Auto LPG Coalition)

Disclaimer: The views, thoughts and opinions expressed in the article are solely the author’s and are not representative of the author's employer/ organisation.