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LIQUEFIED PETROLEUM GAS (LPG)

Tuesday, March 31, 2015

Liquefied petroleum gas or liquid petroleum gas (LPG) also referred to as simply butane, are flammable mixtures of hydrocarbon gases used as fuel in heating appliances, cooking equipment, and vehicles.

LPG being an environment friendly and clean fuel has tremendous potential as replacement for traditional fuels like coal and firewood. On account of dearth of traditional fuels, the use of LPG as cooking fuel has become unavoidable for people in both cities and rural areas. It is today an ideal for modern kitchens, synonymous with safety, reliability and convenience.

Domestic Liquefied Petroleum Gas (LPG) users consume a massive 90% of the total production of LPG in India for cooking purposes. The three PSU oil companies meet the entire demand of the household LPG market. Indian il leads the competition with a share of over 50% in the domestic segment currently accounting for 5.67 million tonnes of the 11.78 million tonne per annum market.

India's LPG imports for public and private sector demand are projected to jump to more than 8 million mt in fiscal 2014-2015 (April-March) from 6.3 million mt in 2013/14, after the government raised the number of subsidized cylinders early this year, Indane is, today, one of the largest packed-LPG brands in the world.

INDIAN 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 & USA

•           Major market of LPG is Domestic Sector ¾ Home Delivery of 3 Million LP Gas cylinders per day (i.e. 900 Million/ year)

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

Demand:   Past & Future

Year                mn MT

2000-01           7.02

2001-02           7.73

2002-03           8.35

2003-04           9.30

2004-05           10.20

2005-06           11.10

2006-07           12.20

2007-08           13.45

2008-09           14.80

2009-10           16.35

2010-11           18.10

2011-12           19.95

2012-13           21.81

2011-14           23.84

2014-15           26.06

2019-20           40.70

Market Structure

Market Segmentation

Segment          Share (%)

Domestic          86

Industrial          10

Other bulk          4

Public               96

Private               4

North               30

East                 12

West                34

South               24

Market Growth Rates

1990-91-1996-97        5.3%

1996-97-2001-02        18.6%

2001-02-2006-07        9.6%

2006-07-2011-12        10.3%

2011-12-2019-20        9.3%

Sensitivity Coefficient  6.0%

Leading Players

Company         Share (%)

IOC                      40

HPC                     20

GAIL                     13

ONGC                  12

BPC                      11

Others                  4

Source: NPCS Team


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