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Environment & Energy

Wolf Reverses Natural Gas Tax Hike

Mike Mozart

Late last year, the Corbett administration increased the state's tax on liquefied natural gas, following a Department of Energy change in how LNG is measured at the federal level.

This week, Governor Tom Wolf reversed the tax increase and made it effective retroactively to January 1, 2015.

Elizabeth Brassell, spokesperson for the Pennsylvania Department of Revenue said the new governor thoroughly considered all of the environmental and economic benefits that come from use of liquefied natural gas, or LNG as an alternative fuel as compared to diesel when making this decision.

“The environmental benefits from LNG are that it’s a cleaner fuel,” she said.

One of Wolfe’s goals is to develop a comprehensive energy portfolio for Pennsylvania that includes alternatives to imported petroleum and diesel.

“LNG is a cheaper alternative to diesel, it generates lower pollutant emissions when used to fill vehicles. And its also produced here in Pennsylvania from abundant natural gas reserves,” she said.

There isn’t a huge financial impact, but there is a larger environmental one.

“The heart of this decision is to offer encouragement and incentive to use LNG rather than punishing taxpayers who are pursuing this clean energy alternative to diesel by making them pay a higher tax rate,” said Brassell. 

For 2015, a gallon of gasoline is subject to state tax of 50.5 cents, while diesel is taxed at 64.2 cents per gallon. LNG will be taxed at 33.5 cents per gallon equivalent.