Square 1 Leasing has launched a business to tap demand for liquefied petroleum gas (LPG) after arranging a deal which, it says, saved a client £500,000 on its fleet of vans.

Square 1 Leasing was set up in February by IT distribution firm Square1, alongside ex-Vehicles4-Business leasing manager Andrew Poole.

It has now launched LPG Fleet Solutions to target companies that use diesel vehicles. 
Poole said the move into LPG was prompted after it supplied four vehicles for Lancashire-based electrical engineering firm Hirst & Danson.

Joe Makepeace, Hirst & Danson’s health and safety manager, said the monthly fuel bill for its 26 vans had doubled to £14,000.

Makepeace said: “When you discover that the price of LPG is 50p a litre and we were paying £1.31 per litre for diesel, it’s a lot of money.”

Hirst & Danson, which turns over £13 million a year, expects to receive around £70,000 from the sale of its old vans, which is being handled by Square 1.

The upfront costs of leasing the new fleet will mean there is a net cost to the business in years one and two but, by the end of the three-year lease, it predicts to be in profit by £250,000 when compared to the cost of continuing to operate a diesel fleet.

However, the firms have agreed a deal that will let Hirst & Danson keep the vans under a full-service and maintenance agreement for a further two years, leading to a total £450,000 saving over five years.

Converting a new petrol van to LPG costs £1,700-£2,000.