Indian LPG Market Prospects - petrofed.winwinho...

Indian LPG Market ProspectsApurva ChandraJoint Secretary-MarketingMOP&NGGovernment of IndiaWorld LPG Forum 2010-Madrid

Overview 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 Scenario‣ Fourth largest consumer of LPGin the world after USA, China &Japan‣ Third largest consumer indomestic sector in the worldafter China & USA‣ Major market of LPG isDomestic Sector‣ Home Delivery of 3 Million LPGas cylinders per day(i.e 900Million/ year)‣ Steady Growth @ 8% p.a. in LPGConsumption in IndiaTop 5 Consumers-Domestic (2008)LPG Demand (TMT) & Growth

Indian LPG Scenario‣ Gap between demand & supply(indigenous production)• Demand in 2009‐10 stands at12746 TMT• Indigenous Production in 09‐10was 10323 TMT• Imports @22% of total LPGDemand• Indigenous LPG productionthrough State Run, Private AndFractionatorsDemand Vs Supply (TMT)Indigenous Production

Indian LPG ScenarioConsumption Pattern:Domestic Commercial IndustrialTransport-Auto LPG‣ Domestic growth is 8‐9% but overall pie hasreduced over the years‣ Commercial & Industrial Consumption isincreasing .‣ World Consumption in Industrial Sector is almost11% & in Transport is 9%High Growth Expected in Commercial/Industrial & Transport Sector

Overview 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

LPG Market ProspectsLPG Penetration in Domestic Sector:Urban Rural TotalPopulation in Million 326.2 838.8 1165Households in Million 95 159 254LPG Connections in Million 83.8 31.2 115.0Penetration of LPG 88% 19.6% 45%Potential Market: Domestic Segment in Rural Areas

LPG Market ProspectsPotential in Rural India:• 72% of Indian Population lives inRural areas• 87% of villages have populationless than 2000Encouraging Facts about Rural Market:• Increase in Purchasing Power• Improving Literacy Levels• Imparting Functional Literacy tofemales• Awareness about clean fuelDistribution of Villages in IndiaPopulationNumber ofVillages% of Total< 200 114267 18%200 ‐ 499 155123 24%Target Market500‐ 999 159400 25%1000‐ 1999 125758 20%2000‐ 5000 69135 11%5000‐ 9999 11618 2%>10000 3064 0%Total 638365 100%LPG can make significant contribution in protecting Environment & Human Health

LPG Market ProspectsIndustrial Sector:Commercial & Industrial LPG Sales• Commercial & IndustrialSegment growing at 27% CAGRfor last 5 years• Achieving Growth through:– Conversions from conventional fuelsto LPG– Creating Awareness about LPG ascleaner fuel– Capital Investments in Industries forLPG Installations

LPG Market ProspectsTransport Sector:Transport-Auto LPGConsumption per Vehicle: Kg/annumSource: WLPGA 2009• 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 consumptionof 451 Kg per annum against world average of 1428 kg per annum.

Overview 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

Stimulating Demand in Domestic SectorVision 2015 of Govt. of India1. Increase in Domestic LPG Connections:• Focus on areas where LPG penetration is low by givingincentives ‐ Raise population coverage from 50% to75%.• Increasing LPG customer from 107 millions to 160millions by 2015• Switch Over from Kerosene to LPG2. Common LPG Kitchen‐Making LPG affordable:• Opening up community Kitchens in all villages withpopulation > 5000 as a part of Corporate SocialResponsibilityProjected Growth in LPG Demand shall be 8-9% year on year till 2015

Stimulating Demand in Domestic SectorVision 2015 of Govt. of India3. Rajiv Gandhi Gramin LPG Vitaran(Low Cost Rural Distribution Model):• Shall improve reach of LPG• A low cost model of distributionsustainable for cluster of villageshaving about 4500 families• Expected Refill Sales: 600 cylindersof 14.2 kg per monthLPG Sales Volume in Domestic Sector shall reach 16MMT by 2015

Stimulating Demand ThroughGovernment of India PoliciesFocus on Rural Areas to increase purchasing power of rural folks• Direct subsidy to farmers• Extension of Debt waiver• Allocation under NREGA increased (NREGA‐National RuralEmployment Guarantee Act)Automotive Sector: Efficient and Cleaner Road Transport• Euro IV Standards• CNG for all public transport• Auto LPG: Encouraging consumers to switch from conventionalfuels to clean alternatives such as LPGIndustrial Sector• Sectoral Initiatives taken by Govt. of India and OMCs forConversion to LPG from liquid Fuels• Stricter pollution control norms propagating use of efficient fuels

Overview of Presentation• Indian LPG Scenario• LPG Market Prospects– Potential in Rural India– Transport Sector– Industrial Sector• Stimulating Demand Through– Vision 2015 of MOP&NG– Government Policies and Schemes• LPG Demand Outlook• Way Forward

LPG Demand Outlook2011-12 2012-13 2013-14 2014-15LPG Demand 14920 16140 17418 18680Projected growth 8% 8.1% 7.9% 7.3%Indigenous productionRefineries 5963 6903 7033 7513Fractionators 2112 2112 2112 2112RIL 2500 2000 2000 2000Essar 800 800 2000 2000Total Prodn. 11375 11815 13145 13625Import Required 3545 4325 4273 5055All Figures in TMT

Overview of Presentation• Indian LPG Scenario• LPG Market Prospects– Potential in Rural India– Industrial Sector– Transport Sector• Stimulating Demand Through– Vision 2015 of MOP&NG– Government Policies and Schemes• LPG Demand Outlook• Way Forward

Infrastructure PlanS.No Infrastructure Capacity in TMTProjectInvestment2009-10 2014-15 USD Million1 Import Handling Terminals 4700 6500 2202 Pipelines Capacity 5323 Tankage (Storage Capacity) 685 912 7004 Bottling Capacity 12097 18037 450

Focus on InfrastructureJalandharKandlaJamnagarMumbaiHighBhatindaHaziraJNPTMangaloreAjmerPanipatGurgaonMumbaiSecunderabadChakanKochiBinaDelhiLoniKanpurBarauniVijayawadaBangaloreChennaiTrichyEnnoreDurgapurVizagHaldiaParadipGuwahatiPROPOSED PIPELINESExisting PipelinesProposed PipelinesExisting RefineryProposed RefineryProposed NEW Pipelines IMPORT TERMINALS Length CostUSDLOCATION Capacity Cost USDParadip – Haldia – Budge 673 km 202 MBudge Ennore– Kalyani – Durgapur 600 TMTPA 90 MEnnore JNPT – Chenglepet – 600 TMTPA 382 km 70 115 MPondy – TrichyKochi 600 TMTPA 60 mMangalore –Bangalore 376 km 110 MMumbai ‐ Uran – Chakan 166 km 105 M

New Initiatives‣ Commissioned World’s Largest FlexSpeed Carousel at one of bottling plantsof State‐owned company (HPCL)‣ Use of Anti Pilferage Device in LPGCylinders‣ Integration of LPG & SKO distributionwith Govt. of India’s UniqueIdentification Project (UIDAI)‣ IVRS/SMS based Refill Booking Systemfor LPG Customers‣ EOI for Composite Cylinders‣ Exploring possibilities of Earning CarbonCreditsAnti Pilferage DeviceProject Aadhaar‐ UIDAI

Audio Visual (AV)on Vision 2015 and Initiatives taken by OMCs

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