switching from kerosene to lp gas · switching from kerosene to lp gas : lessons from indonesia...
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Switching from Kerosene to LP Gas :Switching from Kerosene to LP Gas :Lessons from Indonesia
February 2010February 2010Marketing & Trading DirectorateMarketing & Trading DirectoratePT. Pertamina (PT. Pertamina (PerseroPersero))
WHAT THE PEOPLE FEEL …
“I can cook faster now, especially in the afternoon when I have to work. I have to go as 5.30 A.M. Previously, I never have time to prepare breakfast for my kids. But since I can cook faster. I can since I can cook faster. I can serve them breakfast although its just tempe”, said Nining, one of Conversion Package Receiver.
TILL THE END OF 2009, KEROSENE TO LPG CONVERSION PROGRAM HAS BEEN COVERING 15 PROVINCES ALL OVER INDONESIA
Converted in 2007-2008
Converted in 2009
To be converted in 2010
Will not be converted
THE KEY ACHIEVEMENT
# Households & SME Converted
44 out of 54 Millions
Replacement Value :
Kerosene vs. LPG
24,4
54,0
3,9
15,19,3
2007 08 09 2010 Total
Will be Converted
Converted
6.1325.384
2.973
Kerosene
LPG
1 liter Kero replaced by 0.34 kg LPG
8442.098
102
2.973
304
1.76754721
2010 Target08 20102007 09
State’s Gross Subsidy Saving
Up to 2.6 Bio USD
Nett Saving
Conversion Cost
Gross Saving
1 USD = Rp. 9,324
GOVERNMENT SUBSIDY SAVING REACH 1.5 BILLION USD
Remarks 2007 2008 20092010Feb
2010 Target
Achievement
Initial Packages Distributed(Million Packages)
3.976 15.078 24.355 0.526 14.927 43.936
LPG Volume LPG(Million Ton)
0.033 0.592 1.840 0.304 3.018 2.770
Kerosene Withdrawal(Million KL)
0.102 2.098 5.384 0.844 7.334 8.429
Gross Subsidy Saving(Million USD)
64.35 981.34 1,371.89 163.66 815.25 2,581.23
Initial Packages Cost(Million USD)
85.80 388.25 629.78 12.11 343.32 1,115.93
Nett Subsidy Saving(Million USD)
(21.45) 593.09 742.11 151.55 471.93 1,465.30
1 USD = Rp. 9,324, 1 Liter of Kerosene ~ 0.4 Kg LPG
The remaining kerosene volume pushed up the ground work for only about 4.6 million KL is much smaller than 2009 Government target for 5.8 million KL. While the volume of LPG PSO reached 1.7 million MT of the 2009 Government target for 1.6 million MT. So that it can be concluded that the conversion program run faster with a very significant subsidy savings of approximately 2.6 billion USD.
336 335 376
390 410
438 432 441 508
600
700
800
900
1,000
Govt. Regulation
Issued
Kerosene Withdrawal Volume (Thousand KL/month)
Kerosene Sales Volume(Thousand KL/month)
Dry DKI Jakarta
16 May 08
Dry Jabodetabek
17 Aug 08
Dry West Java
30 April 09
KEROSENE SALES VOLUME DROP FROM 830,000 KL/MONTH TO 270,000 KL/MONTH
Initiation Period
Conversion Start
Demonstration arose
everywhere
Dry Jogjakarta
10 Nov 08
837 792
499 496
455 441 421
393 399
390 363 339 323
281
438 432 441 468 492
508 550 561
93 101 99 112 121 131 137
153 163 170 188 181
205
270
-
100
200
300
400
500
No
v-0
6
De
c-06
Jan
-07
Fe
b-0
7
Ma
r-07
Ap
r-07
Ma
y-0
7
Jun
-07
Jul-0
7
Au
g-0
7
Se
p-0
7
Oct-0
7
No
v-0
7
De
c-07
Jan
-08
Fe
b-0
8
Ma
r-08
Ap
r-08
Ma
y-0
8
Jun
-08
Jul-0
8
Au
g-0
8
Se
p-0
8
Oct-0
8
No
v-0
8
De
c-08
Jan
-09
Fe
b-0
9
Ma
r-09
Ap
r-09
Ma
y-0
9
Jun
-09
Jul-0
9
Au
g-0
9
Se
p-0
9
Oct-0
9
No
v-0
9
De
c-09
Volume decrease
5.04 M KL/year
Sales LPG PSO(Thousand MT/month)
Volume LPG
1.76 M MT/year
(Thousand KL/month)
2009
achievement
InfrastructurePre Conversion
< 2007
Conversion Period
2008 - 2010
Storage •On shore tank: 136,000 MT
•Thruput: 3,700 MT/day
•On shore tank: 167,000 MT
•Floating storage: 120,000 MT
•Thruput: 9,000 MT/day
LPG Vessels •6 LPG Pressurized vessels
@1,800 MT
•3 VLGC @ 44,000 MT
•5 LPG semi-refrigerated vessels @ 11,400 MT
•6 LPG Pressurized vessels @ 1,800 MT
Filling Station •66 stations (12 kg)
•Capacity ∼ 6,000 MT
•202 stations already operated
•11 Pertamina LPG Depo
LPG INFRASTRUCTURE GROWTH RAPIDLY DURING CONVERSION PERIOD WITH AVERAGE STOCKPILE ABOVE 15 D AYS
1
2
3•Capacity ∼ 6,000 MT •11 Pertamina LPG Depo
•15 COCO Stations
•176 Private Stations
•499 permits has been issued.
•Capacity ~ 10,080 MT
Skid Tank •5,000 MT/day •9,000 MT/day.4
NOWADAYS CONVERSION PROGRAM DRIVE INVESTMENT UPTO 1 .9 BILLION USD AND ABSORB MORETHAN 28 THOUSAND LABORSIN THE FUTURE IT WILL DRIVE INVESTMENT UPTO 2.7 BILLION USD AND ABSORB MORETHAN 38 THOUSAND LABORS
*) Investment in million USD
1,545.138,206
PresentInvestment
Future Investment
Present Labor
Future Labor
Private Sectors Government
941.3
961.61,184.1
28,176
38,206
THE KEROSENE TO LPG CONVERSION PROGRAM TAKE BENEFIT TO WHOLE NATIONS
State’s GrossSubsidy SavingUp to 2.6 Bio
# New Investor529
Energy Cost Saving)42%
# of Trees saved **)46.6 Mio
Indonesia Government
BusinessEnvironment
End Users
EnvironmentCO2 Reduction
Up to 2.6 Bio USD
Nett Saving1.5 Bio USD
529
Value of Investment
1.9 Bio USD
42%(4 USD/Month)
% of program Supporter *)
94.1 %
46.6 Mio
# of Cars taken Equivalent **)
2.8 Mio
*) Based on Internal Survey. November 2009**) Modified from GreenworksAsia Report on Emission Reduction from Conversion Program, November 2008
KEY SUCCESS FACTORS
1. Strong Government Policy
2. Strong & Effective Implementation
3. Readiness of Logistic & Infrastructures
LPG Producers
Terminal LPG Refrigerated• Land
Terminal (Tg Uban)
• Floating Storage Offloading (FSO)
LPG Pressurized Depot
Filling Station
AgentSub Agent
Retailer
End User
RetesterWorkshop
LPG Bottle Producers
IMPACT CONVERSION TO THE LPG DEMAND-SUPPLY
Demand - Supply Real 2009 2010 2011
A Demand
PSO (3 kg) 1,839,617 3,001,528 3,484,159
non PSO 1,135,991 1,267,435 1,305,424
Total Demand 2,975,608 4,268,963 4,789,584
(MT)
B Supply
Pertamina’s Refinery 770,713 957,040 907,024
Pertamina’s Upstream 51,093 47,000 47,000
Other Domestic Producers 1,213,179 1,255.680 1,292,085
Import *) 1,091,483 2,009,243 2,543,474
Total Supply 3,126,468 4,268,963 4,789,584
*) Import volume will decrease as production from domestic producers increase.
LPG BUSINESS GROWTH VS INFRASTRUCTURE
InfrastructureInfrastructurePre ConversionPre Conversion(Before 2007)(Before 2007)
Conversion PeriodeConversion Periode(2007(2007--2010)2010)
Post ConversionPost Conversion(After 2010)(After 2010)
Conversion Periode
/hari
2007 2008 2009
Pre Conversion
PostConversion
Storage * 136,000 Mton 267,000 Mton 345,000 Mton
Vessel6 Vessels
Pressurized @ 1,800 Mton
5 VesselsSemiref @ 10,000 MT
6 VesselsPressurized @ 1,800 Mton
3 FSO VesselsRefrigerated @ 45.000 MT
6-8 VesselsSemiref @ 10,000 MT
10 VesselsPressurized @ 1,800 Mton
1 FSO VesselsRefrigerated @ 45,000 MT
Filling Station Filling Capacity
5,000 Mton/day 9,000 Mton/day 17,000 Mton/day
Skid Tank Transport Capacity
5,000 Mton 9,000 Mton/day 17,000 Mton/day
1
2
3
4
* As per Government’s Requirement : LPG Stockpile 7.5 days for NPSO. 11 days for PSO
HOUSEHOLD COOKING COST SAVING
Product Unit PriceConsumption
volume for 8 days
Consumption cost for 8 days
Consumption Cost for 1 month
(30 days)
Kerosene27 Cent
USD/Liter8 Liter 2.15 USD 8.04 USD
LPG 3 Kg46 Cents USD/Kg
3 Kg 1.37 USD 5.13 USDUSD/Kg
Saving 78 Cents USD 2.92 USD
Notes :o 1 USD = Rp. 9,324o 1 Liter of Kerosene ~ 0.4 Kg LPG
GOVERNMENT SUBSIDY SAVING
Remark 2007 2008 20092010Feb
2010 Target
Total Achievement
Initial Packages Distributed(Million Packages)
3.976 15.078 24.355 0.526 14.927 43.936
LPG Volume LPG(Million Ton)
0.033 0.592 1.840 0.304 3.018 2.770
Kerosene Withdrawal(Million KL)
0.102 2.098 5.384 0.844 7.334 8.429 (Million KL)
0.102 2.098 5.384 0.844 7.334 8.429
Gross Subsidy Saving(Million USD)
64.35 981.34 1,371.89 163.66 815.25 2,581.23
Initial Packages Cost(Million USD)
85.80 388.25 629.78 12.11 343.32 1,115.93
Nett Subsidy Saving(Million USD)
(21.45) 593.09 742.11 151.55 471.93 1,465.30
Notes :o 1 USD = Rp. 9,324o 1 Liter of Kerosene ~ 0.4 Kg LPG