Reduction in auto LPG price leads to 16% jump in sales over three months

There has been a 16 percent jump in the sales of auto LPG between October and December 2016 in India, following a reduction in its price. The development is seen as positive as auto LPG is believed to be a cleaner fuel than traditional fuels and also helps reduce air pollution significantly.

According to Suyash Gupta, director general of the Indian Auto LPG Coalition (IAC), leading oil companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum have, since October 2016, reduced auto LPG price which makes it about 50 percent cheaper than petrol and even cheaper than diesel. This has led to a 16 percent jump in its sales between October-December 2016.   

At preset, the price of LPG per litre in New Delhi is Rs 35.57 compared to Rs 71.14 per litre of petrol and Rs 59.02 per litre of diesel. Autocar Professional had, earlier this month, reported that in the past year, petrol has turned costlier by Rs 12 a litre, and diesel by Rs 15.

“Auto LPG is a low-hanging fruit and the government must make use of this to make a tangible effect on air quality almost immediately. Most other cleaner fuels are still at a drawing board stage,” said Gupta.  

IAC is the nodal body for the promotion of auto LPG in India and its members include oil sector PSUs such as Indian Oil Corporation, private auto LPG marketers such as Total, Aegis, SHV, Reliance and others together with kit suppliers and equipment manufacturers.

Out of the 1,100 auto LPG filling outlets in 500 cities across India, more than 50 percent are owned by the public sector companies like Indian Oil, HPCL and BPCL while the rest are operated by private players. Uttar Pradesh is one of the most prominent states with auto LPG penetration. There are 19 auto LPG stations in Delhi (NCR).

Why LPH has potential for greater use

A recent study conducted by Marketing and Development Research Associates (MDRA) says that auto LPG can cheaply and quickly replace diesel and petrol in transport across the country as the fuel can be transported by tankers and sold through existing filling stations, unlike CNG that requires the laying of pipelines, which takes several years.

Moreover, auto LPG fuel tanks are compact and lighter than CNG and can be easily integrated in the car without much loss of trunk space. Also, refuelling time for auto LPG is similar to other conventional (petrol and diesel) fuels unlike CNG, which takes much more time to refill primarily because of the very high pressures that CNG operates at. This creates long queues and a high waiting time at CNG stations.

“The cost of LPG vehicles – both factory fitted or OEM and retro-fitted – is also lower than that of CNG,” remarked president IAC and executive director of IOC, Y KGupta.

Retrofitting an LPG car costs about Rs 20,000 compared to Rs 30,000 for a CNG car. An LPG kit for a two-wheeler would cost Rs 7,000 and about Rs 13,000 for a CNG bike.

The study states that the most significant contribution of auto LPG is in improving air quality – it has 22 percent lower CO2 than petrol, 96 percent lesser NOx than diesel and 120 times lower PM emissions than diesel. More than 26 million vehicles run on auto LPG globally in more than 70 countries, which is why auto LPG has become the third largest selling fuel in the world, after petrol and diesel.

The study maintains that auto LPG will be continuously available in India at very low, compelling prices in the foreseeable future as global LPG production is growing faster than demand (10 MMT in excess; 2015).