lpg market prospects india

Indian LPG Market ProspectsIndian LPG Market Prospects

ApurvaApurva ChandraChandraJoint SecretaryJoint Secretary--MarketingMarketing

MOP&NGMOP&NGGovernment of IndiaGovernment of India

World LPG Forum 2010-MadridWorld LPG Forum 2010World LPG Forum 2010--MadridMadrid

Overview of PresentationOverview of Presentation

• Indian LPG Scenario

• LPG Market Prospects– Potential in Rural India-Domestic Sector– Industrial Sector – Transport Sector

• Stimulating Demand Through– Vision 2015 of MOP&NG– Government Policies and Schemes

• LPG Demand Outlook

• Way Forward

Indian LPG ScenarioIndian LPG Scenario

Fourth largest consumer of LPG in the world after USA, China & Japan

Third largest consumer in domestic sector in the world after China & USAMajor market of LPG is Domestic Sector

Home Delivery of 3 Million LP Gas cylinders per day(i.e 900 Million/ year)

Steady Growth @ 8% p.a. in LPG Consumption in India

LPG Demand (TMT) & Growth

Top 5 Consumers-Domestic (2008)


Gap between demand & supply (indigenous production)

• Demand in 2009‐10 stands at 12746 TMT

• Indigenous Production in 09‐10 was 10323 TMT

• Imports @22% of total LPG Demand

• Indigenous LPG productionthrough State Run, Private And Fractionators

Demand Vs Supply (TMT)

Indigenous Production


High Growth Expected in Commercial/Industrial & Transport Sector

Consumption Pattern:Domestic Commercial Industrial

Transport-Auto LPG Domestic growth is 8‐9% but overall pie has reduced over the years

Commercial & Industrial Consumption is increasing .

World Consumption in Industrial Sector is almost 11% & in Transport is 9%



• LPG Market Prospects– Potential in Rural India-Domestic Sector– Industrial Sector– Transport Sector



• Way Forward

LPG Market ProspectsLPG Market Prospects

Potential Market: Domestic Segment in Rural Areas

Urban Rural Total

Population in Million 326.2 838.8 1165

Households in Million 95 159 254

LPG Connections in Million 83.8 31.2 115.0

Penetration of LPG 88% 19.6% 45%

LPG Penetration in Domestic Sector:


Potential in Rural India:• 72% of Indian Population lives in

Rural areas• 87% of villages have population

less than 2000

Encouraging Facts about Rural Market:

• Increase in Purchasing Power• Improving Literacy Levels• Imparting Functional Literacy to

females• Awareness about clean fuel

LPG can make significant contribution in protecting Environment & Human Health

Distribution of Villages in India

PopulationNumber of Villages

% of Total

< 200 114267 18%

200 ‐ 499 155123 24%

500‐ 999 159400 25%

1000‐ 1999 125758 20%

2000‐ 5000 69135 11%

5000‐ 9999 11618 2%

>10000 3064 0%

Total 638365 100%

Target Market


Industrial Sector:

• Commercial & Industrial Segment growing at 27% CAGR for last 5 years

• Achieving Growth through:

– Conversions from conventional fuels to LPG

– Creating Awareness about LPG as cleaner fuel

– Capital Investments in Industries for LPG Installations

Commercial & Industrial LPG Sales


Transport Sector:

• Auto LPG sales increasing by 30% CAGR between 2005‐06 and 2009‐10 • With 0.5 Million vehicles running on Auto Gas, India has per vehicle consumption of 451 Kg per annum against world average of 1428 kg per annum.

Source: WLPGA 2009

Transport-Auto LPG Consumption per Vehicle: Kg/annum



• LPG Market Prospects– Potential in Rural India-Domestic Sector– Industrial Sector– Transport Sector



• Way Forward

Stimulating Demand in Domestic SectorStimulating Demand in Domestic Sector

Vision 2015 of Govt. of India

1. Increase in Domestic LPG Connections:• Focus on areas where LPG penetration is low by giving incentives ‐ Raise population coverage from 50% to 75%.

• Increasing LPG customer from 107 millions to 160 millions by 2015

• Switch Over from Kerosene to LPG

2. Common LPG Kitchen‐Making LPG affordable:• Opening up community Kitchens in all villages with population > 5000 as a part of Corporate Social Responsibility

Projected Growth in LPG Demand shall be 8-9% year on year till 2015

Stimulating Demand in Domestic SectorStimulating Demand in Domestic Sector

Vision 2015 of Govt. of India

3. Rajiv Gandhi Gramin LPG Vitaran

(Low Cost Rural Distribution Model):

• Shall improve reach of LPG

• A low cost model of distribution

sustainable for cluster of villages

having about 4500 families

• Expected Refill Sales: 600 cylinders of 14.2 kg per month

LPG Sales Volume in Domestic Sector shall reach 16MMT by 2015

Stimulating Demand ThroughStimulating Demand Through

Government of India Policies

Focus on Rural Areas to increase purchasing power of rural folks• Direct subsidy to farmers• Extension of Debt waiver • Allocation under NREGA increased (NREGA‐National Rural Employment Guarantee Act)

Automotive Sector: Efficient and Cleaner Road Transport• Euro IV Standards• CNG for all public transport• Auto LPG: Encouraging consumers to switch from conventional fuels to clean alternatives such as LPG

Industrial Sector• Sectoral Initiatives taken by Govt. of India and OMCs for Conversion to LPG from liquid Fuels

• Stricter pollution control norms propagating use of efficient fuels



• LPG Market Prospects– Potential in Rural India– Transport Sector– Industrial Sector



• Way Forward

LPG Demand Outlook LPG Demand Outlook

2011-12 2012-13 2013-14 2014-15

LPG Demand 14920 16140 17418 18680

Projected growth 8% 8.1% 7.9% 7.3%

Indigenous production

Refineries 5963 6903 7033 7513

Fractionators 2112 2112 2112 2112

RIL 2500 2000 2000 2000

Essar 800 800 2000 2000

Total Prodn. 11375 11815 13145 13625

Import Required 3545 4325 4273 5055

All Figures in TMT



• LPG Market Prospects– Potential in Rural India– Industrial Sector– Transport Sector



• Way Forward

Infrastructure PlanInfrastructure Plan

S.No Infrastructure Capacity in TMT Project Investment

2009-10 2014-15 USD Million

1 Import Handling Terminals 4700 6500 220

2 Pipelines Capacity 532

3 Tankage (Storage Capacity) 685 912 700

4 Bottling Capacity 12097 18037 450

Focus on InfrastructureFocus on Infrastructure

Mumbai

Vizag

Panipat

Guwahati

Haldia

Vijayawada

Kochi

Barauni

Kanpur

Kandla

Jalandhar

Delhi

Chennai

MumbaiHigh

Mangalore

Secunderabad

Ajmer

Paradip

Jamnagar

Loni

Hazira

Trichy

Gurgaon

Bangalore

Chakan

Existing Pipelines

Proposed Pipelines

Ennore

JNPT

Durgapur

NEW IMPORT TERMINALSLOCATION Capacity Cost USD

Ennore 600 TMTPA 90 M

JNPT 600 TMTPA 70 M

Kochi 600 TMTPA 60 m

Existing Refinery

Bhatinda

BinaProposed Refinery

PROPOSED PIPELINES

Proposed Pipelines Length Cost USD

Paradip – Haldia – Budge Budge – Kalyani – Durgapur

673 km 202 M

Ennore – Chenglepet –Pondy – Trichy

382 km 115 M

Mangalore – Bangalore 376 km 110 M

Mumbai ‐ Uran – Chakan 166 km 105 M

New InitiativesNew Initiatives

Commissioned World’s Largest Flex Speed Carousel at one of bottling plants of State‐owned company (HPCL)

Use of Anti Pilferage Device in LPG Cylinders

Integration of LPG & SKO distribution with Govt. of India’s Unique Identification Project (UIDAI)

IVRS/SMS based Refill Booking System for LPG Customers

EOI for Composite Cylinders

Exploring possibilities of Earning Carbon Credits

Anti Pilferage Device

Project Aadhaar‐ UIDAI

Audio Visual (AV)

on Vision 2015 and Initiatives taken by OMCs

Thank YouThank You

lpg market prospects india

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