Alternative Fuel Tax

The state road tax for vehicles that operate on propane (liquefied petroleum gas or LPG) is paid through the purchase of an annual flat fee sticker, and the amount is based on the vehicle's gross vehicle weight rating. Each person owning and/or operating a vehicle that operates on propane must obtain a decal annually from the Alabama LPG Board. The decal must be affixed to the vehicle according to LPG Board specification as proof that the issuance fee and decal fee have been paid. Vehicle owners must apply for a decal within 10 days of converting a vehicle to operate on propane or natural gas, or a 20% penalty will be applied to the decal fee. Out-of-state alternative fuel vehicle operators that purchase propane within the state must pay the current Alabama motor fuel tax or they may elect to purchase the annual flat fee decal. The propane dealer or supplier must remit these funds to the LPG Board before the 20th of the month following the date of sale. The tax rate on compressed natural gas (CNG) and liquefied natural gas (LNG) used as a vehicle fuel are applied in the amounts below:

CNG:
  • $0.08 per gasoline gallon equivalent (GGE) until September 30, 2023;
  • $0.13 per GGE from October 1, 2023, until September 30, 2028; and
  • $0.18 per GGE from October 1, 2028 and beyond.

LNG:
  • $0.08 per diesel gallon equivalent (DGE) until September 30, 2023;
  • $0.13 per DGE from October 1, 2023, until September 30, 2028; and
  • $0.18 per DGE from October 1, 2028 and beyond.

A GGE will be equal to 5.66 pounds (lbs.) or 126.67 cubic feet of natural gas for CNG and a DGE is equal to 6.06 lbs. for LNG.

(Reference Code of Alabama 40-17-160 through 40-17-165)

Point of Contact
Mark Nelson
Administrator
Alabama Liquefied Petroleum Gas Board
Phone: (334) 241-8887
mark.nelson@lpgb.alabama.gov