Propane Use For Fleet Vehicles

Propane Use for Fleet Vehicles

The #1 Alternative Motor Fuel in the World

Propane, also known as LPG (liquefied petroleum gas), is the leading alternative fuel in the country. It is also the nation’s third most common vehicular fuel today, after gasoline and diesel. There are over 270,000 on-road vehicles in the United States and more than 10 million worldwide that operate on propane (Source: US Department of Energy, World LP Gas Association). A large number of these are used in fleets that include light-to heavy-duty trucks, buses, taxicabs, police cars, and rental and delivery vehicles.

No. of Propane Vehicle in Use in the US 1993-2002


Source: Alternative Fuels Data Center, US Energy Information Administration


Propane offers fleet operators distinct economic advantages over conventional fuels (gasoline and diesel). The Battelle Memorial Institute found that propane is the most economical alternative fuel for fleets (on a per mile basis) when operating, ownership, and infrastructure costs are all taken into consideration. Operating costs associated with propane fleets typically range from 40-50 percent less than those of gasoline fleets (Source: National Propane Gas Association).

From an economic perspective, propane is the most cost effective alternative to conventional transportation fuels when capital costs (vehicle and infrastructure) and operation and maintenance costs are all taken into consideration. Of all available alternative fuels, propane offers the best mix of vehicle driving range, durability and performance.

Infrastructure Costs

The capital structure needed for production, storage, and bulk distribution of propane for traditional uses already exists. Some additional investments may be required for automotive uses to accommodate the higher throughput. The majority of incremental infrastructure costs however, relates primarily to the expansion of the distribution network.

Existing service station infrastructure used for conventional fuels can be modified to dispense propane. The additional costs of adapting a station for propane use is low compared to the requirements for other alternative fuels. For example, the cost of installing the necessary equipment for dispensing propane (tank, pump and metering equipment) is about one-third of that for dispensing CNG (dedicated supply lines, high-pressure compression, storage cylinders, and special dispensers) (Source: World LP-Gas Association).

Capital Costs

The majority of propane vehicles on the road today are converted vehicles. The offerings from OEMs (original equipment manufacturers), although increasing, are still relatively few. Fleet vehicles can be conveniently converted to propane use. Conversion costs vary, depending upon the type of original vehicle and equipment installed. According to the Alternate Fuels Data Center, factory conversions of light-duty trucks typically cost about $6,000 over the conventional vehicle base price. Conversion costs generally range from $3,000 to $6,000. Other fees may be applied, such as the cost of EPA testing and documentation. On the other hand, there may be tax deductions or other incentives available to offset the up-front capital cost. Some dealers lease the conversion equipment, which virtually eliminates upfront costs. Regardless of initial capital costs the typical ROI (return on investment is less than 18 month).

A significant advantage to fleet owners is the fact that part of the conversion costs may be deducted from federal taxable income. State and local tax incentives are also available, and details can be obtained from local propane dealers, conversion companies, and/or government tax agencies (see below)

Operating Costs

The upfront costs of propane fleet vehicles can be offset by lower operating and maintenance costs over the lifespan of the vehicles. The time it takes for these savings to offset the capital costs (payback period) depends on vehicle usage patterns but is normally based on the average distance traveled monthly or annually. Fleet vehicles typically travel long distances and have very high fuel consumption, so the payback period on propane fleet vehicles can be very reasonable (12 months or less).

Fuel Costs
Fuel is the principal operating cost for fleets. On average, a gasoline gallon equivalent (gge) of propane is generally less than that of gasoline (Source: US Department of Energy) and federal excise taxes on propane (13.6 cents/gal) are lower than for gasoline (8.4 cents/gal) and diesel fuel (24.4 cents/gal).

Propane can deliver up to 90 percent of gasoline’s miles per gallon with significantly less environmental pollutants. Its fuel efficiency relative to gasoline surpasses those of all other alternative fuels – 70 percent for ethanol, 54 percent for methanol, and 21 percent for compressed natural gas (see chart below).

Auto fuel type comparison
Auto fuel type comparisonThis comparison uses identical vehicles optimized for their specific fuel. The baseline is a gasoline-fueled vehicle with enough fuel to travel 100 miles. Distance shown is based on the relative energy content (British Thermal Units – BTUs) of each fuel gallon. If all vehicles were fitted with equal volume tanks, propane gas would require the least fill-ups on a trip, followed by ethanol, methanol and CNG. Source: Michigan Propane Gas Association

Download one of the spreadsheets to see fleet cost analysis and adjust the economic model to suit your situation.

Maintenance Costs

Lower maintenance costs are one of the prime reasons underlying propane’s popularity for use in delivery trucks, taxis, and buses. Propane’s high octane rating (104-112 compared with 87-92 for gasoline) and low carbon and oil contamination characteristics have resulted in documented engine life of up to three times that of gasoline or diesel engines (Source: National Propane Gas Association). Many fleets have also reported extended intervals between required maintenance. Spark plugs from unleaded gasoline engines typically have to be replaced after 30,000 miles, but those in a propane vehicle can last 80,000-100,000 miles.

Is this a Good Choice for your Vehicles?

Propane is an excellent fuel choice for fleet vehicles, which have characteristics that make them ideal candidates for propane operation. Typical characteristics include:

  • High fuel usage
  • Significant emissions
  • Urban locations
  • Centrally fueled
  • Fixed and/or limited routes
  • Susceptibility to government mandates
  • Special vehicle orders
  • High public visibility

Fleet operators do not have to sacrifice performance for environmental friendliness. The power, acceleration, payload, and cruise speed of propane-fueled vehicles are comparable to those obtained with equivalent internal-combustion engines. In addition to its superiority in environmental benefits, propane is safe, readily available, and makes good economic sense.

Environmentally Preferred

At the top of the federal government’s environmental agenda is the need to reduce air pollution caused by engine emissions. The use of clean-burning fuels is critical to achieving this goal. Propane is on the Environmental Protection Agency’s (EPA) list of federally approved clean-burning fuels. Furthermore, propane is contained in a sealed, pressure-tight system at all times, and there are no evaporative emissions. This eliminates a significant source of secondary pollution.

Propane is clean burning. Tests conducted by the EPA show that propane engines produce 60 percent less ozone-forming emissions than reformulated gasoline. Recent tailpipe emissions tests performed on Orange County (California) Transit Authority’s propane buses showed they emitted 87 percent less total hydrocarbons, 50 percent less nitrogen oxides, and 40 percent less particulate matter than gasoline-fueled buses.


Propane is nontoxic and nonpoisonous, and has a very small flammability range (the lowest among all the alternative fuels). Propane vehicle tanks are tested to four times the normal operating pressures, and the tanks are 20 times as puncture resistant as gasoline tanks. (Source – Puget Sound Clean Cities Coalition).

Readily Available

More than 90% of all propane used in the US is produced domestically meaning the revenue from this source of energy would stay in the USA. There are over 10,000 public propane refueling stations and an established network of licensed propane conversion centers throughout the country, and the numbers are growing.