India: Auto LPG Consumption Growth Returns

The segment is estimated to grow at 20 per cent in the current year. In the period between December 11 and March 1, Indian Oil’s auto LPG price in Delhi declined by 11 per cent to Rs 24.37 a litre, in tune with the decreasing crude oil prices.

With this price decline, the diversion of domestic LPG to automobiles has also registered a decline, said an oil industry official. Domestic LPG sales registered a fat growth of about 1 per cent last year. Using domestic LPG cylinders in automobiles is illegal.

LPG is a clean, high octane, abundant and eco-friendly fuel that is obtained from natural gas through fractionation and from crude oil through refining. It is a mixture of petroleum gases like ethane and butane. The use of LPG as an automotive fuel in India was permitted with effect from April 2000.

In order to promote the consumption of auto LPG, oil marketing companies have consciously priced it about 40 per cent cheaper than petrol. For instance, while petrol sells at Rs 45.55 a litre in Mumbai, auto LPG sells at Rs 26.73 a litre.

While vehicle owners can opt for either a an LPG-petrol run vehicle or a CNG vehicle, LPG has some advantages over CNG. The space required for storing a particular volume of LPG is one-third of that required by CNG. Moreover, LPG has a better calorific power of 66.1 Mega Joules per Kilogram vis a vis CNG’s 47.7.

The consumption of auto LPG in 2008-09 is estimated at 180,000 tonnes, down around 10 per cent from the previous year’s levels. The decline can be attributed to the dip in consumption in the October-January period.

In order to meet the projected growth in demand for auto LPG this year, Indian Oil plans to add more retail outlets. “We currently operate around 225 auto LPG stations and plan to add 100 more outlets in the current year to meet the growing demand,” said a company spokesperson.

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