LPG (Liquefied Petroleum Gas): Definition, Uses, and Price Factors
LPG — liquefied petroleum gas — is a widely used vehicle fuel and cooking energy source, stored as a liquid under pressure. In many countries it enjoys significant tax advantages over petrol, making it one of the cheapest per-litre fuels at the pump.
What LPG Is
LPG is a mixture of propane (C₃H₈) and butane (C₄H₁₀) produced as a by-product of natural gas processing and crude oil refining. At ambient temperature and pressure it is a gas, but it liquefies under relatively modest pressure (around 8 bar / 116 psi), making it practical to store and transport in compact tanks — either on-vehicle cylinders or at filling stations.
When used as a vehicle fuel it is referred to as autogas in many markets. The composition (propane-to-butane ratio) varies by season and country: more propane in colder climates (lower boiling point), more butane in warmer climates (better energy density). The World LPG Association (WLPGA) publishes global market data and standards for automotive LPG, including their annual World LPG Report covering country-by-country adoption and infrastructure. The IEA LPG overview provides production and trade statistics.
LPG vs. Petrol: Energy Density and Efficiency
LPG has a lower energy density than petrol:
| Fuel | Energy (MJ/L) | Relative to petrol |
|---|---|---|
| Petrol (E5) | ~32.5 | 100% |
| LPG (propane) | ~23.4 | ~72% |
| LPG (butane) | ~26.8 | ~82% |
| CNG (compressed) | ~9.0 per litre equiv. | ~28% (per litre; energy per kg is higher) |
| Diesel | ~35.9 | ~110% |
A petrol engine converted to LPG will use roughly 20–25% more LPG by volume to travel the same distance. So if petrol costs €1.50/L and LPG costs €0.80/L, the net fuel cost per 100km on LPG is: (100 / 12 L/100km LPG efficiency) × €0.80 = €6.67 vs. (100 / 9.6 L/100km petrol) × €1.50 = €15.63 — a meaningful saving. The maths depends heavily on local price levels.
Why LPG Is Cheaper: Tax Treatment
In most countries where LPG is sold as vehicle fuel, it carries lower excise duty than petrol or diesel. The rationale historically was that LPG was a by-product (low marginal cost to produce), had lower CO₂ per unit energy than petrol, and served a niche transport market. The EU Energy Taxation Directive sets minimum excise rates for LPG below those for petrol and diesel, though the proposed revision under the EU Energy Taxation reform (2021 proposal) would align all fossil fuel taxes with carbon content — narrowing LPG's advantage. See the EU fuel tax harmonisation article for how these differentials are being reconsidered under climate policy, and our excise duty glossary entry for how duty rates are set and applied.
Turkey and South Korea additionally subsidise or tax-preference LPG for domestic policy reasons. In Turkey, a policy dating from the early 2000s makes LPG roughly half the per-litre price of petrol — fuelling the world's largest LPG vehicle market. The Turkish EPDK energy market regulator publishes weekly LPG and petrol retail prices in Turkey.
LPG vs. CNG
Both are gaseous fuels used in vehicles, but they differ significantly:
- Storage pressure: LPG ≈ 8 bar (liquid); CNG ≈ 200–250 bar (compressed gas), as defined by ISO 15500 for CNG vehicle systems
- Tank weight: CNG tanks are much heavier (high-pressure steel/composite)
- Range: LPG gives better range per tank volume (higher energy density as liquid)
- Conversion cost: LPG conversion is cheaper and simpler (~€1,000–2,000 for petrol engines); CNG conversion requires high-pressure tanks (~€3,000–5,000). The NGVA Europe publications track CNG and LNG vehicle adoption across Europe.
- Infrastructure: LPG is widely available in Europe; CNG more limited except in Italy and parts of Central Europe. The NGVA Europe statistics map CNG station density by country.
See our CNG glossary entry for a deeper comparison.
Environmental Profile
LPG produces about 15–20% less CO₂ per km than petrol in a converted vehicle, and significantly less particulate matter — quantified in the EEA transport emissions data and the WLPGA well-to-wheel emissions report. However, propane and butane are themselves greenhouse gases if they leak. The net climate benefit compared to modern petrol hybrids is now narrow, and LPG lacks the zero-tailpipe appeal of battery electric vehicles. The IEA Global EV Outlook 2024 covers how LPG's market share is evolving as EV uptake accelerates. Its role in the energy transition is increasingly viewed as a bridge fuel for markets without strong EV infrastructure.
For a broader comparison of alternative fuels at the pump, see our EV charging costs vs. petrol guide.
Frequently Asked Questions
Is LPG cheaper than petrol?
LPG typically costs 40–60% less per litre than petrol in most markets where it benefits from lower excise duty under the EU Energy Taxation Directive. However, LPG has about 25–30% lower energy density, so fuel economy in LPG-converted vehicles is lower. Net cost per kilometre is usually still 20–35% lower than petrol — verified by WLPGA cost-per-km analysis.
What is the difference between LPG and CNG?
LPG is mainly propane and butane, stored as a liquid under moderate pressure (around 8 bar). CNG is mainly methane, stored as a compressed gas at very high pressure (200+ bar) per ISO 15500. LPG has higher energy density per litre but CNG is generally cheaper per unit of energy in countries with domestic natural gas production. The NGVA Europe tracks infrastructure and vehicle numbers for both. See our CNG glossary entry for the full comparison.
Which countries have the most developed LPG vehicle markets?
Turkey, South Korea, Poland, Italy, and Australia have the largest LPG vehicle fleets. Turkey alone has over 4 million LPG vehicles — the largest in Europe — driven by tax incentives. The WLPGA World LPG Report provides country-by-country fleet and infrastructure data, and the IEA LPG statistics track production and consumption trends.