In an attempt to keep Infraline Energys’ readers abreast with the key issues and challenges engulfing the sector, Infraline Energy tries to bring forth the opinion of key personnel whose decisions and opinion play a vital role in shaping the sector. Please find below excerpts from the interview that Infraline Energy conducted:
Suyash Gupta, Director General Indian Auto LPG Coalition (IAC) shares his views on the auto LPG market in India, global trends and what India needs to do to tackle the growing menace of air pollution. Excerpts:
Please highlight the recent developments in the Indian auto LPG market.
500+ cities in the country are covered with around 1100 auto LPG filling stations. More than half of these are owned by Public Sector through IOC, HPC, BPC.In the private sector, companies like Reliance, Total Oil, Aegis, and SHV - SuperGas have taken up lead in setting up these stations.About 25 lakh vehicles in the country are estimated to be running on LPG today. Most of these vehicles are aftermarket conversions with less than 20 % accounting for OEM Models.
Auto LPG for the past several years has been about 40% of the price of petrol.While this made it significant cheaper than petrol, yet its running cost was higher than that of diesel. However with effect from October 1, 2016, the PSUs radically cut down the pricing of auto LPG to around 50% of the price of petrol. This effectively made it not just 50 % cheaper than petrol but cheaper than diesel as well in terms of running costs and comparable to CNG.
For a city like Lucknow, the running cost of petrol vehicle (with an estimated mileage of 14.3km/ litre), comes out to be Rs. 5.11 per km, for diesel vehicle, running cost comes out to be Rs. 3.45 per km, for CNG vehicle, the running cost comes out to be Rs. 2.69 per km, whereas, for an LPG vehicle it is even cheaper and comes out to be Rs. 2.58 per km.
On account of this, industry has already seen an increase in the sales volumes. Industry-wide monthly sales jumped from around 26 thousand tonnes in the month of October 2016 to over 30 thousand tonnes in December 2016, thus registering a 16% growth. Owing to these radical changes, industry is expected to close this fiscal year with an overall growth of more than 4% over the last year.
How auto LPG is helping as a step- forward to a cleaner transport fuel and helping in tackling pollution?
Auto LPG is the world’s 3rd most selling automotive fuel after petrol and diesel. More than 26 Million vehicles run on auto LPG globally, consuming more than 26 million tonnes of LPG.Auto LPG is a low hanging fruit with extremely clean emissions. LPG has 22 percent lower CO2 than petrol, 96 percent lesser NOx than diesel and 68 percent lesser than petrol, and PM - 120 times lower emission than diesel.
It also provides tremendous opportunity to avoid usage of high polluting carcinogenic diesel-fuelled cars for personal and public transport.That Auto LPG has helped various Governments globally to tackle air quality issues and emerges from the fact that several similar counties like Turkey and Korea are one of the biggest users of LPG globally. It is notable to mention here that more than 40% of the four wheeler vehicle cars in Turkey run on LPG.
It is a low hanging fruit in terms of the fact that all other similar cleaner fuels need huge amount of capital investment as well as a gestation period running into several years to build pipeline and related infrastructure, whereas an Auto LPG station can be set up in as quickly as over a 60 to 90 day period, thus providing an immediate relief and impacting urban air quality.
In the wake of rising prices of petroleum, what is the future of auto LPG as the future fuel of India?
On account of the massive shale gas outputs coming from the US, LPG market globally has seen a major growth. LPG prices have come down from being at around $1200/tonne to about $500/ tonne.
With the shale impact expected to continue, LPG prices are expected to remain at lower levels in the foreseeable future.
India is projected to be one of the biggest car markets in India in future. Please provide suggestions on reducing vehicular pollution in India. What are the advantages of auto LPG as a fuel in comparison to others like biofuels and upgraded emission norms like BS-IV?
India needs to adopt the right mix of cleaner fuels. While bio fuels look great on paper, yet availability of the same shall always remain a challenge particularly on account of India’s efforts to ensure availability of food for masses at lower prices. Any increase in demand of bio fuel shall undoubtedly impact prices.
Meanwhile in terms of the much talked Electric vehicles, Government needs to realise and consider the total well-to-wheel emissions, particularly for a country like India which produces most of its electricity from coal-based power plants. Electric vehicle may ultimately be more pollutant than gaseous fuel.To adopt any fuel strategy the government really needs to formulate a judicious mix of all cleaner fuel available.LPG offers one such solution which is available immediately.
What are the key issues being faced by the auto LPG industry in India? What are your suggestions to address the same?
One of the key issues is differential pricing on various grades of LPG, which results in diversion on subsidized domestic LPG to automotive usage. Secondly, there is a need for OEMs to push LPG variants.
Infraline Energy would like to thank the contributor for his/her valuable time and opinion shared on the topic.