There is lack of a clear vision of the environmental impacts resulting from using the alternative Liquified Natural Gas (LPG) as a fuel for vehicles instead of the current diesel and gasoline in the city of Baghdad. Conversion to LPG is the installation of a second fuel system, including an LPG tank, adjustments of the intake manifold, a new electronic control unit and different fittings. Such modifications allow the vehicles to run on both fuels. The global trend of realizing the importance of using alternative fuels such as LPG, has been encouraging Iraqi ministry of oil to focus more on exploration and exploitation projects. LPG is preferred as it regarded a clean fuel that do not pollute the environment. This confirmed fact was an incentive for energy experts to explore new avenues, which make it an alternative to other hydrocarbons. An overview of the environmental issues of implementation the LPG vehicles program in five cities in Baghdad Governorate will be addressed. The five air pollutants (SO2, NO2, NOx PM10 and CO) relationship and the LPG vehicles ratio will be analyzed by panel data analysis. Results show that PM10 and CO is slightly significantly decreased with an increase in the LPG vehicles ratio. SO2 and NO2 reveal no statistically significant relationship with LPG vehicles’ ratio.