NGV Economics

Comparison of PG&E and third Party

There are several economic benefits to using CNG:

  • Lower fuel costs: Natural gas is typically 1/3 to the cost of gasoline per gallon equivalent.
  • Reduced maintenance intervals: Natural gas doesnt contaminate the engine oil like traditional fuels - hence less frequent oil changes.
  • Access to HOV Lanes: California is one state where NGVs are permitted to travel in the HOV (High Occupancy Vehicle) lanes with only a single person in the vehicle and no bridge tolls during commute hours.
  • Reduce dependence on foreign oil: Natural gas is a U.S. fuel and reduces our dependence on foreign energy supplies.
  • CNG is consistently cheaper than gasoline or diesel.

Light-duty natural gas vehicles tend to cost $4,000 to $8,000+ more than a gasoline-powered vehicle. The cost of medium and heavy-duty vehicles is largely dependent on the type of vehicle and the number of fuel storage cylinders. Frequently, financial incentives and tax credits are available from local, state and federal agencies to help offset the initial higher premium. Additional benefits include access to carpool or High Occupancy Vehicle (HOV) lanes with a single occupant and bridge toll waiver. See the Fueling Locations section for your local station.

To learn more specifics about natural gas vehicles call 1 (800) 684-4648.

Federal Tax Credits for Vehicles, Infrastructure and Fuel

  • Section 1341 of the Energy Policy Act of 2005 provides a tax credit to buyers of new dedicated alternative fuel vehicles beginning January 1, 2006. See the Alternative Motor Vehicle Credit, Drive Clean or IRS Hybrid Cars and Alternative Fuel Vehicles
  • Section 1342 of the Energy Policy Act of 2005 provides a tax credit equal to 30% of the cost alternative refueling property, up to $30,000 for business property. See the Alternative Fuel Infrastructure Tax Credit
  • Section 1113: of the Transportation Equity Act (HR3) provides a volumetric excise tax credit to the seller of natural gas (CNG or LNG)
  • The credit is for 50 cents per gallon of CNG or LNG (to sellers or retailers)
  • An increase of the excise tax has also been put into effect
    • CNG has increased from 4.3 cents to 18.3 cents per gge
    • LNG has increased from 11.9 cents to 24.3 cents per LNG gallon
  • With payment of the excise tax, the credit for CNG will be for 31.7 cents per gge, and 43.37 cents per diesel gallon equivalent (dge) of LNG (1.7 gals of LNG ≈ 1 gallon of diesel.)

The excise fuel tax credit included in the Transportation Equity Act will not be available until October 2006, and is in effect until October 2009. See California and Federal Incentives and Laws for information for your local stations.