According to figures from the Society of Motor Manufacturers and Traders (SMMT), only 489 new petrol/gas cars were bought last year, down from 3,185 in 2003.
The Powershift grant collapsed last April following funding problems and the Government has been grappling with the European Union about how any future funding could be structured.
Mike Chapman, autogas manager at the LPG Association, agreed that fleets were no longer ordering LPG cars, but that aftermarket conversions were still popular.
He said: "It’s true that fleets are holding back because the lack of information about potential new grant structures has made it difficult to budget. Grants are crucial to fleets.
"However, there were 16,000 aftermarket conversions last year, compared with 15,000 in 2004. We also believe there were around 1,300 new car sales by manufacturers last year, not 489."
A key factor in the massive drop in new LPG car sales stems from Vauxhall’s decision to no longer offer LPG versions of the Astra, although conversions are now handled through its Millbrook subsidiary.
Also, car manufacturers are increasingly smitten with biofuel and hybrid vehicles, pushing LPG into the shadows.
SMMT chief executive Christopher Macgowan warned the Government against showing favouritism for the latest, most fashionable alternative fuel.
He said: "The Government needs to be careful to support all options and not to favour one technological solution over all others."