Satisfying Enormous Growth Potential7th to 9th October-2009, Rio de Janerio, BrazilRural Demand In IndiaPresentation by:Apurva Chandra, Joint Secretary(Marketing)Ministry of Petroleum and Natural Gas, Government of India
LPG Market- Uniqueness of IndiaSecond largest packed LPG market in the world
LPG in cylinders, home delivered to more than 108 million households.
Customer population increasing by 6 million each year.
For better affordability product is subsidized.
For better logistics by packaging near to market, bottling plants even at remotest corners- At Leh highest altitude, At Andamans the island situated in Bay of Bengal.Deployed Latest Technology for Storage- Cavern
LPG- History & BackgroundLPG Marketing Commenced in India in 1955Started by Burmah Shell in MumbaiPublic Sector Oil Company , Indian Oil Commenced Operation of LPG Marketing in 1965 at Kolkatta and Patna
Product availability improved from 1998Customer strength grew from 20M to 100M in a decadeSales jumped from 1241TMT in 1985 to 11400 TMT in 2008Currently catering to more than 50% of Indian population.
Growth poised more towards rural marketsCustomer growth rate(in millions)1985-2009
Sales in TMT1985-2009
Various Products Marketed in LPGDomestic LPGPacked product in 14.2Kg, & 5kg cylinders, home delivered through distributorsNon Domestic LPGPacked product 19Kg and 47.5 kg delivered supply through distributors. Bulk Delivered to Storage Tanks of Customers- Business Associates to garner CustomersAuto LPGThrough Retail Outlets along with MS/Diesel and/or stand alone outletsShare of Products
Chart4
10302
572
258
200
2007-08
PACKED DOMESTIC91%
IND BULK2%
NON DOMESTIC5%
Sheet1
YEARPACKDNDNEIND. BULKAUTO LPGTOTAL
2004-059531118230109889
2005-069447283172779979
2006-07974242522813610531
2007-081030257225820011332
Sheet1
00000
00000
00000
00000
PACKD
NDNE
IND. BULK
AUTO LPG
TOTAL
YEAR
Sheet2
2007-08
PACKED10302
NDNE572
IND BULK258
AUTO LPG200
Sheet2
1110
0
0
0
#REF!
#REF!
#REF!
2007-08
Sheet3
0
0
0
0
2007-08
Domestic LPG Business OverviewTotal Customer Strength : 108 MAverage Enrolment (current) : 6 M YearlyDaily Bottling : 2.4 millionBottling Plants : 190Refineries, Gas Processing Plants & Imports
190 Bottling Plants
9382Distributors
108 million Customers
There is steady growth in LPG consumption in the last 4 years. (Figs. In TMT)
. LPG Marketing Overview Consumption Pattern - LPG
Chart2
10052105311133211778
2005-06
2006-07
2007-08
2008-09
10531(5.5%)
11332(7.6%)
11778(4%)
GROWTH OF LPG - DOMESTIC
YEAR2005-062006-072007-082008-09
Domestic LPG10052105311133211778
GROWTH OF LPG - DOMESTIC
Domestic LPG
GROWTH OF LPG NON DOME
YEAR2004-052005-062006-072007-08
Other than Domestic LPG3585327891030
GROWTH OF LPG NON DOME
0
0
0
0
Other than Domestic LPG
Trend of Other than Domestic LPG
SHARE OF LPG
2007-08
PACKED10302
NDNE572
IND BULK258
AUTO LPG200
SHARE OF LPG
0
0
0
0
2007-08
PACKED91%
NDNE5%
IND BULK2%
AUTO LPG2%
DEMAND
2004-052005-062006-072007-08
Demand10043100521053111333
Production7738764884098868.7
DEMAND
00
00
00
00
Demand
Production
FINANCIAL YEAR
DEMAND IN TMT
MODE TRANSPORT
LPG PIPELINE25
RAILWAY WAGONS12
ROAD MOVEMENTS63
MODE TRANSPORT
0
0
0
MODE OF TRANSPORTATION OF BULK LPG
LPG PIPELINE25%
RAILWAY WAGONS12%
ROAD MOVEMENTS63%
FUTURE PRODN DEMAND
PRODUCTIONDEMAND
2008-09887612078
2009-10867012802
2010-111035713571
2011-121112714385
FUTURE PRODN DEMAND
887612078
867012802
1035713571
1112714385
PRODUCTION
DEMAND
FINANCIAL YEAR
DEMAND IN TMT
Availability shareout
00
00
00
00
PRODUCTION
DEMAND
FINANCIAL YEAR
DEMAND IN TMT
BP CAPACITY
Actual Prodn. In TMT
PSU Refineries3855
Pvt. Refineries2892
Fractionators2122
Import2598
BP CAPACITY
0
0
0
0
Actual Prodn. In TMT
Availability Shareout (2007-08)
Import23%
Fractionators19%
PSU Refineries33%
Pvt. Refineries25%
Sheet5
CAPACITY (in TMTPA)NO. OF BPs
IOC570089
BPC291548
HPC323142
Sheet5
00
00
00
CAPACITY (in TMTPA)
NO. OF BPs
3231
2915
5700
MARKET SHARE
Tankage (TMT)
Prodn. Sources220
BPs266
Import Terminals162
MARKET SHARE
0
0
0
Tankage (TMT)
Import Terminals25%
BPs41%
Prodn. Sources34%
Actual Sale in TMT
IOC5464
BPC2999
HPC2871
0
0
0
Actual Sale in TMT
UrbanRuralPopulation wiseDivision- RuralDomestic LPG PenetrationUrban- Rural Population 14%83%3%
LPG Penetration- Issues in Rural Areas
Most of Rural Households natural biomass or kerosene
Biomass based fuels lead to health hazards and pollution
Use of Kerosene by the households at a subsidised rate.
Per Capita Income of rural areas- affordability
Viability of distribution cost as rural households are scattered.Potential Available in Rural Area- more than 50 million
Chart1
13
13
13
1.2
68
17
1.6
2030
Sheet1
mtoeFirewoodCrop ResidueCowdung CakeCoalKeroseneLPGOthers
20301313131.268171.6
Vision 2015- Govt.s Thrust on LPG in Rural Areas To enroll total of 55 m new LPG connections by 20158.5 million every yearMostly in Rural areasThrough existing distributors and Small Format DistributorsConversion of Kerosene customers
Strategies for Rural Market- PenetrationModels to improve reachThrough existing Distribution network By Expanding Existing model of Distributor Network Low Cost , Self Employment based LPG distributors as a viable modelCommunity Kitchen
Strategies to improve affordability Continue to give Favorable relative price Access Subsidization For economically Backward By State Governments Oil Marketing Companies- Corporate Social ResponsibilityConversion of Kerosene
Model based on Viability
Gramin LPG Vitrak (GLV) meaning Rural LPG Distributor
GLV sustainable for cluster of villages having about 4500 families. 40 % population villagers may go for LPG.
Scheme to improve Viability1800 consumers required for sale of 600 cylinders of 14.2 kg per month.Per Capita 5Kg per month Proprietor himself to operate with the help of 1 staffOption for part time jobSmaller Godown and showroom located close byCylinders will be sold on cash and carry basisDistributorship to those who are in possession of requisite land at advertised location
Low Cost, Self Employment Rural Model
Community KitchenScheme introduced in 2003-04 for Community Kitchens in Hospitals, Mid day meal scheme etc.Model extended to areas below viability of distributorships and for villagers with low purchasing power.
Kitchen to be set up by nearest distributor.Utensils and stoves through Marketing Companies/State Government.Villagers to use facility on user fee basis.Care taker by Village officials/Distributor.
Supply Demand Balance ImportIndigenous ProductionDemand LPG Demand Projections Expected CAGR 8% Asia Pacific CAGR 6% LPG Supply OutlookExisting Refineries being expanded and 3 new Refineries being commissioned. However, dependence on Imports to continue Two import facilities Kochi & Chennai 1400TMTPA HistoricalProjectionImportIndigenous ProductionDemand
Chart3
1005276482453
1053184091982
1133389732598
1177892872592
Demand
Indegenous Production
Import
Year
TMT
Sheet1
2009-102010-112011-122012-132013-142014-15
Demand124851324013940147091547516228
Indegenous Production102501053713612136321363213632
Import22352703328107718432596
2009-102010-112011-122012-132013-142014-15
Demand124851324013940147091547516228
Indegenous Production102501053713612136321363213632
Import22352703328107718432596
2005-062006-072007-082008-09
Demand10052105311133311778
Indegenous Production7648840989739287
Import2453198225982592
Sheet1
000
000
000
000
000
000
Demand
Indegenous Production
Import
Year
TMT
Sheet2
2005-06
2006-07
2007-08
2008-09
Sale/Demand
10052
10531
11333
11778
%age growth
0.09
4.76
7.6
3.9
Indigenous Production
Refineries
3316
3661
3855
3805
Fractionators
2134
2089
2121
2113
RIL
2198
2653
2703
2869
Essar
0
6
294
500
Total Prodn.
7648
8409
8973
9287
Imports
2453
1982
2598
2592
Demand
Indegenous Production
Import
Year
TMT
0
0
0
0
0
0
0
0
0
0
0
0
Sheet3
Chart4
12485102502235
13240105372703
1394013612328
14709136321077
15475136321843
16228136322596
Demand
Indegenous Production
Import
Year
TMT
Sheet1
2009-102010-112011-122012-132013-142014-15
Demand124851324013940147091547516228
Indegenous Production102501053713612136321363213632
Import22352703328107718432596
2009-102010-112011-122012-132013-142014-15
Demand124851324013940147091547516228
Indegenous Production102501053713612136321363213632
Import22352703328107718432596
2005-062006-072007-082008-09
Demand10052105311133311778
Indegenous Production7648840989739287
Import2453198225982592
Sheet1
Demand
Indegenous Production
Import
Year
TMT
Sheet2
2005-06
2006-07
2007-08
2008-09
Sale/Demand
10052
10531
11333
11778
%age growth
0.09
4.76
7.6
3.9
Indigenous Production
Refineries
3316
3661
3855
3805
Fractionators
2134
2089
2121
2113
RIL
2198
2653
2703
2869
Essar
0
6
294
500
Total Prodn.
7648
8409
8973
9287
Imports
2453
1982
2598
2592
Demand
Indegenous Production
Import
Year
TMT
Sheet3
MumbaiVizagPanipatGuwahatiHaldiaVijayawadaKochiBarauniKanpurKandlaJalandharDelhiDigboiChennaiMumbaiHighMangaloreSecunderabadAjmerParadipJamnagarLoniHaziraLPG Infrastructure Existing PipelinesProposed PipelinesBhatindaKolkatta
FacilityExistingPlan/Under ConstructionRefinery193Gas Plants10-Import4(3500TMT)2(1400TMT)Bottling Plants18913Pipelines2182 KM1000 KM
Modes of Transportation :
LPG Infrastructure / Logistics
Pipeline contribution upto 35% by 2015
Chart4
9447283172179
9742425228136
10307573259200
10634713252179
PACKED DOMESTIC
NDNE
BULK
AUTO LPG
ChartMode Transport
30
12
58
Mode Trans
LPG Pipelines30% Volumes
Railway Wagons12% Volumes
Road Movement58% Volumes
LPG Pipelines30
Railway Wagons12
Road Movement58
Chart2
3805
2113
3369
Break up of Indigenous availability - 2008-09
Sheet1
PSU Refineries3805
Fractionators2113
Private Refineries3369
Chart1 -Pron Imp
9287
2592
Ratio of Indigenous availability vis-a-vis Imports - 2008-09
9287 TMT(78%)
2592 TMT(22%)
Prodn - import
Indigenous production9287
Imports2592
SECTOR4YRS (2)
SECTOR WISE SALES 2008 -09
2005-062006-072007-082008-09
PACKED DOMESTIC944797421030710634
NDNE283425573713
BULK172228259252
AUTO LPG179136200179
NON-SUBSIDISED10081105311133911778
PACKED DOMESTIC944797421030710634
NDNE283425573713
BULK172228259252
AUTO LPG77136200179
NON-SUBSIDISED53278910321144
TOTAL9979105311133911778
SUBSIDISED LPG SALES944797421030710634
NON-SUBSIDISED SALES53278910321144
TOTAL9979105311133911778
SECTORCHART
1063490.2869757174
7136.0536593649
2522.139582272
1791.5197826456
SECTOR WISE SALES - 2008-09
SECTOR4YRS
SECTOR WISE SALES 2008 -09
2005-062006-072007-082008-09
PACKED DOMESTIC94479497429310307911063490
NDNE2833425457357136
BULK1722228225922522
AUTO LPG1792136120021792
10081105311133911778
SECTOR
SECTOR WISE SALES 2008 -09
PACKED DOMESTIC1063490
NDNE7136
BULK2522
AUTO LPG1792
11778
MARKETSHAREchart
567048.1406011207
308526.1929020207
302325.6664968585
MARKET SHARE - 2008-09
26%
marketshare
MARKET SHARE
IOCL567048
BPCL308526
HPCL302326
TOTAL11778
PROD.CHART
380532.0313157673
336928.3609731459
211317.7876925667
259221.8200185201
LPG PRODUCTION EX- VARIOUS SOURCES
PRODUCTION
PSU Refineries380532
Pvt. Sector Refineries336928
Fractionators211318
Import259222
11879
IMPORTCHART
865
1491
2217
2453
1981
2583
2592
IMPORT
IMPORT TRENDS
IMPORTS
2002-032003-042004-052005-062006-072007-082008-09
IMPORT865149122172453198125832592
Chart3
9979
10531
11332
11778
LPG CONSUMPTION PATTERN
Sheet2
2005-069979
2006-0710531
2007-0811332
2008-0911778
Investment Planned Till 2015
FacilityNumbers/ CapacityInvestment Million USDImport Facility2 (1400 TMTPA)140Tankage Traditional/Mounded14.3 TMT50 Cavern0.1 MMTPA110PipelinesPlanned1000km515
Investment Planned till 2015
FacilityNumbers / CapacityInvestment Million USDBottling PlantsUnder Construction2 X 44 TMTPA10 Planned6 x 44 TMTPA40 Filing EquipmentsAugmentation900 TMTPA20Equipments ( Cylinders & Regulators)65 million1560Total 2445
ConclusionIn India, LPG is the most sought after fuel for domestic use. Government of India has developed a Vision 2015 document for increasing use of LPG in India.
The Vision 2015 document is focused to improve customer Service and availability of LPG.
Government of India is committed to increase the penetration of LPG in Rural India by providing LPG at affordable price.
As a commitment to Environment, Government of India is also committed to replace kerosene by LPG at the earliest.
Thank You
Domestic LPG PenetrationSource : NCAERHuge Potential Available in Rural Area
UrbanRuralTotalPopulation March 2009 in Million326.2838.81165Households in Million93.1156249LPG connections in Million81.226.8108Penetration85%17%42%Per capita consumption (Kg/year)12883117
Indian LPG ScenarioDemand & Production 2004-09 Sources of Bulk LPGImport Growth (TMT)Source CountriesSource: PPAC/Industry Figures
Chart1
3855
2892
2122
2598
Actual Prodn. In TMT
PSU Refineries33%
Pvt. Refineries25%
Fractionator19%
Import23%
GROWTH OF LPG
YEAR2004-052005-062006-072007-08
Domestic LPG95319447974210302
Non Domestic LPG3585327891030
GROWTH OF LPG
Domestic LPG
Non Domestic LPG
FINANCIAL YEAR
DEMAND IN TMT
SHARE OF LPG
2007-08
PACKED10302
NDNE572
IND BULK258
AUTO LPG200
SHARE OF LPG
2007-08
PACKED91%
NDNE5%
IND BULK2%
AUTO LPG2%
DEMAND
2004-052005-062006-072007-08
Demand10043100521053111333
Production7738764884098868.7
DEMAND
Demand
Production
FINANCIAL YEAR
DEMAND IN TMT
FUTURE PRODN DEMAND
PRODUCTIONDEMAND
2008-09887612078
2009-10867012802
2010-111035713571
2011-121112714385
FUTURE PRODN DEMAND
FINANCIAL YEAR
DEMAND IN TMT
Availability shareout
PRODUCTION
DEMAND
FINANCIAL YEAR
DEMAND IN TMT
MARKET SHARE
Actual Prodn. In TMT
PSU Refineries3855
Pvt. Refineries2892
Fractionators2122
Import2598
MARKET SHARE
Actual Prodn. In TMT
Availability Shareout (2007-08)
PSU Refineries33%
Pvt. Refineries25%
Fractionators19%
Import23%
Actual Sale in TMT
IOC5464
BPC2999
HPC2871
Actual Sale in TMT
Chart4
865
1491
2217
2453
1981
2583
2592
IMPORT
IMPORT
2002-032003-042004-052005-062006-072007-082008-09
IMPORT865149122172453198125832592
IMPORT
0
0
0
0
0
0
0
IMPORT
LPG IMPORT
GROWTH OF LPG - DOMESTIC
YEAR2004-052005-062006-072007-08
Domestic LPG95319447974210302
GROWTH OF LPG - DOMESTIC
0
0
0
0
Domestic LPG
GROWTH OF LPG NON DOME
YEAR2004-052005-062006-072007-08
Other than Domestic LPG3585327891030
GROWTH OF LPG NON DOME
0
0
0
0
Other than Domestic LPG
Trend of Other than Domestic LPG
SHARE OF LPG
2007-08
PACKED10302
NDNE572
IND BULK258
AUTO LPG200
SHARE OF LPG
0
0
0
0
2007-08
PACKED91%
NDNE5%
IND BULK2%
AUTO LPG2%
DEMAND
2004-052005-062006-072007-08
Demand10043100521053111333
Production7738764884098868.7
DEMAND
00
00
00
00
Demand
Production
FINANCIAL YEAR
DEMAND IN TMT
MODE TRANSPORT
LPG PIPELINE25
RAILWAY WAGONS12
ROAD MOVEMENTS63
MODE TRANSPORT
0
0
0
MODE OF TRANSPORTATION OF BULK LPG
LPG PIPELINE25%
RAILWAY WAGONS12%
ROAD MOVEMENTS63%
FUTURE PRODN DEMAND
PRODUCTIONDEMAND
2008-09887612078
2009-10867012802
2010-111035713571
2011-121112714385
FUTURE PRODN DEMAND
00
00
00
00
FINANCIAL YEAR
DEMAND IN TMT
Availability shareout
00
00
00
00
PRODUCTION
DEMAND
FINANCIAL YEAR
DEMAND IN TMT
BP CAPACITY
Actual Prodn. In TMT
PSU Refineries3855
Pvt. Refineries2892
Fractionators2122
Import2598
BP CAPACITY
0
0
0
0
Actual Prodn. In TMT
Availability Shareout (2007-08)
PSU Refineries33%
Pvt. Refineries25%
Fractionators19%
Import23%
Sheet5
CAPACITY (in TMTPA)NO. OF BPs
IOC570089
BPC291548
HPC323142
Sheet5
00
00
00
CAPACITY (in TMTPA)
NO. OF BPs
5700
2915
3231
MARKET SHARE
Tankage (TMT)
Prodn. Sources220
BPs266
Import Terminals162
MARKET SHARE
0
0
0
Tankage (TMT)
Prodn. Sources34%
BPs41%
Import Terminals25%
Actual Sale in TMT
IOC5464
BPC2999
HPC2871
0
0
0
Actual Sale in TMT
Chart1
1143
286
351
432
72
Saudi Arabia50%
Kuwait13%
Abu Dhabi15%
Malaysia 19%
Iran3%
GROWTH OF LPG
YEAR2004-052005-062006-072007-08
Domestic LPG95319447974210302
Non Domestic LPG3585327891030
GROWTH OF LPG
Domestic LPG
Non Domestic LPG
FINANCIAL YEAR
DEMAND IN TMT
SHARE OF LPG
2007-08
PACKED10302
NDNE572
IND BULK258
AUTO LPG200
SHARE OF LPG
2007-08
PACKED91%
NDNE5%
IND BULK2%
AUTO LPG2%
DEMAND
2004-052005-062006-072007-08
Demand10043100521053111333
Production7738764884098868.7
DEMAND
Demand
Production
FINANCIAL YEAR
DEMAND IN TMT
MODE TRANSPORT
LPG PIPELINE25
RAILWAY WAGONS12
ROAD MOVEMENTS63
MODE TRANSPORT
MODE OF TRANSPORTATION OF BULK LPG
LPG PIPELINE25%
RAILWAY WAGONS12%
ROAD MOVEMENTS63%
FUTURE PRODN DEMAND
PRODUCTIONDEMAND
2008-09887612078
2009-10867012802
2010-111035713571
2011-121112714385
FUTURE PRODN DEMAND
FINANCIAL YEAR
DEMAND IN TMT
Availability shareout
PRODUCTION
DEMAND
FINANCIAL YEAR
DEMAND IN TMT
BP CAPACITY
Actual Prodn. In TMT
PSU Refineries3855
Pvt. Refineries2892
Fractionators2122
Import2598
BP CAPACITY
Actual Prodn. In TMT
Availability Shareout (2007-08)
PSU Refineries33%
Pvt. Refineries25%
Fractionators19%
Import23%
TANKAGE
CAPACITY (in TMTPA)NO. OF BPs
IOC570089
BPC291548
HPC323142
TANKAGE
CAPACITY (in TMTPA)
NO. OF BPs
5700
2915
3231
Sheet6
Tankage (TMT)
Prodn. Sources220
BPs266
Import Terminals162
Sheet6
Tankage (TMT)
Prodn. Sources34%
BPs41%
Import Terminals25%
MARKET SHARE
SAUDI ARABIA1143
KUWAIT286
ABU DHABI351
MALAYASIA432
IRAN72
MARKET SHARE
Actual Sale in TMT
IOC5464
BPC2999
HPC2871
Actual Sale in TMT
**India, already has a network of oil pipelines for supplying crude oil to the inland refineries viz. Guwahati, Mathura, Panipat, Barauni, Koyali etc., and for transportation of the petroleum products from the refineries and port terminals to inland depots and bulk consumers. Most of these pipelines are located in Eastern, western and northern parts of the country.At present the country has about 11,500 km of cross-country pipelines for transportation of crude oil and petroleum products. These pipelines are owned and operated by various oil and gas companies viz. Indian Oil Corporation Limited (IOCL), Gas Authority of India Limited (GAIL), Oil India Limited (OIL), Oil & Natural Gas Corporation Limited (ONGCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Petronet VK Limited (PVKL). Except PVKL, all other companies are state owned.
Continuous efforts to reduce bulk LPG movement through road is being done so as to optimize on the transportation cost and also considering the safety aspects.
Road transportation during 2007-08 was nearly 63% of the total volume handled which has now been reduced to 58% with the commissioning of Panipat Jalandhar pipeline. ***
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