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.
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.
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. See the EU fuel tax harmonisation article for how these differentials are being reconsidered under climate policy.
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)
- 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)
- Infrastructure: LPG is widely available in Europe; CNG more limited except in Italy and parts of Central Europe
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. 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. 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. 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 depending on conversion efficiency and local price levels.
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). LPG has higher energy density per litre but CNG is generally cheaper per unit of energy in countries with domestic natural gas production.
Which countries have the most developed LPG vehicle markets?
Turkey, South Korea, Poland, Italy, and Australia have the largest LPG vehicle fleets in proportion to total vehicles. Turkey alone has over 4 million LPG vehicles — the largest fleet in Europe — driven by tax incentives that make LPG around half the price of petrol per litre.