Indian Growth Looks Certain
By Suyash Gupta, Secretary General, Indian Auto LPG Coalition, India
Riding on the back of continued OE vehicle launches, with an estimated 1.5 million autogas vehicles in the country, India clocked an impressive growth rate of 28% last year. Autogas consumption touched 318,000 Tonnes in the year in India. Close to 900 stations are operational across the country, spread over 400 cities, making autogas the most widely available cleaner, alternate auto fuel.
Leading Players
Indian Oil led autogas sales with a 35% share with more than 270 autogas stations operational. Bharat Petroleum and Hindustan Petroleum followed with a share of close to 18% and 16% respectively. In the private sector, Reliance was the largest player with close to 135 filling stations and a sales share of about 10%. In addition to these, more than 200 stations of other players like SHV, Aegis, Vanaz, Total, Gas Energy, IPPL, Cleanfuel and others serve the autogas consumers.
OE activity, growing fast, but India still after-market driven
The OE activity has been growing. With an eye on the fast growing autogas market, most vehicle manufacturers started factory fitted autogas offerings. Suzuki motors, which was the first entrant in the autogas segment, now has three autogas models Omni, Wagon R and its basic model Maruti 800. Today most of leading OEs have autogas variants of their frontline models, namely Hyundai (Accent, Santro), General Motors (Spark), Tata Motors (Indica V2), Mahindra (Logan, 3 wheelers), Bajaj (2-W Platina, 3 W), TVS and Hindustan Motors etc.
However, India is still a retrofit driven market. OE models comprise about 300,000 vehicles, whereas the aftermarket about 1,200,000 indicating a significant opportunity for the OEs, which is just 20% of the total autogas fleet currently.
Booming Automobile sector, high percentage of Petrol Vehicle, tremendous opportunity
With a vehicle population in excess of close to 95 million, India still managed to achieve a stupendous growth of 26.4% growth last year with more than 12.2 million vehicles hitting Indian roads. Some 1.9 m vehicles in the Passenger Car segment were sold, with a segment growth of 25.5% and 15.8% of the total vehicle sales. More than 9.3 million two wheelers sold in 2009-10, signifying 76% share of all vehicles sold.
As on date, India has a vehicle population of more than 95 million vehicles, of which 72% are 2 wheelers and 13% being passenger cars. Signifying a huge opportunity to the aftermarket convertors and the autogas fuel providers, figures available indicate that for all new vehicles more than 70% are petrol driven, which indicates a tremendous scope for autogas powered automobiles.
Rationalization of subsidies under way
In the last week itself, the government has already taken significant steps forward to rationalize the subsidies, starting off by decontrolling petrol and diesel pricing and increasing the pricing of the domestic LPG Cylinder as well. This would result in a higher differential of autogas with petrol and makes for a better case for consumers to convert to autogas.
From a consumers perspective, autogas is an attractive choice in several cities, since it is cheaper than petrol (by approximately 40%), easily available (900 Stations,covering 400 plus cities), has faster refueling times than other alternate fuels, with much lower cost conversions (approx US$400 for a passenger car).
Air Quality
Oil consumption is responsible for 57% of the CO2 in the country today and among this, CO2 emissions from transport are increasing at the fastest rate, more than 6% per annum. Read this together with the fact that more than half of Indian cities are choking on critical levels of particulates, a third have hopped from low to moderately high levels of nitrogen dioxides and lung function impairment is facing over 50% of Delhi’s residents. Meanwhile, World Energy Outlook (WEO), 2007, of International Energy Agency, has alerted India crossing the tipping point of per capita GDP of $3000, at which, historically, vehicle ownership rates begin to escalate rapidly, further compounding the transport emission issues India is grappling with. It is critical for both the central and state governments, to shift to cleaner fuels like autogas and make it mandatory for all public transport.
State wise measures
Several Indian cities including Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, made use of fiscal measures to address the problem of vehicular pollution.
Though still very nascent, these new policy initiatives have begun to take roots. These fiscal measures can enable rapid introduction of clean fuels like autogas and create fiscal incentives. The cities that have taken the lead in this regard include Delhi, Tamil Nadu, Bangalore and Hyderabad. These cities have evolved state, city specific models of policy framework. Key focus of these fiscal measures are clean fuels, disincentives for older vehicles; and creation of dedicated fund from taxes on polluting fuels to pay for pollution control efforts.
Significant success has been achieved in Bangalore, where LPG was made mandatory in three wheelers. With about 40 filling stations, many with twin dispensers, Bangalore now serves more than 75,000 autogas rickshaws and is one the most successful autogas markets in the country.
Apart from non-fiscal incentives, Bangalore put in fiscal measures to give a thrust to the autogas conversion in the city.
i. Green tax
Bangalore introduced a Green tax that is imposed on the older vehicles. Introduced on April 1, 2002, tax schemes are different for transport and personal vehicles. Transport vehicles that are more than 7 years old pay the green tax at the rate of Rs. 200 at the time of the annual renewal of their permits. Two-wheelers and cars that are more than 15 years old are taxed at the rate of Rs.250 and Rs.500 respectively at the time of the renewal of their registration after 15 years from the date of purchase and first registration.
ii. Fiscal incentive for autogas conversion
Bangalore has launched one of the largest LPG three-wheeler programmes, one of the key elements being fiscal incentive for conversion. City government has offered a subsidy of around Rs 2000 to three-wheeler owners to help bear the cost of conversion. Nearly 75,000 auto rickshaws have already converted to LPG.
Similarly, Kolkata and Chandigarh have initiated firm efforts.
Kolkata High Court order mandates all 15 year old public vehicles to be replaced on or before July 31 this year. Out of 32,000 auto rickshaws plying on the streets of Kolkata and its suburbs, 4000 have converted to autogas. The high court had earlier set December 31 as the deadline for removing these auto rickshaws, but later extended it to July 31. Auto emissions account for over 60% of the city’s air pollution and close to 50% of the city’s residents suffer from major respiratory disorders. Carcinogenic benzene levels in 2006-07, were found to be as high as 36 ug/cum, much higher than Delhi, which has a larger vehicle population. This is against an average limit of 5 ug/cum, specified by the National Draft Ambient Air Standard. Starting September 1, 2009, the Union Territory of Chandigarh shall allow only LPG 3 wheelers to ply on its roads. Chandigarh has more than 2,000 autorickshaws running on its roads and almost an equal number of them come to the city from its satellite towns of Mohali and Panchkula.
Similarly Chennai and Pune have effectively introduced autogas with about 25 and 13 autogas filling stations respectively and with over 10,000 auto rickshaws already running on autogas in Pune.
Please contact Suyash Gupta for more information on autogas in India: suyash@vsnl.com
About IAC
Indian Auto LPG Coalition, IAC, is the nodal auto LPG stakeholders’ body committed to promote clean environment through the use of Auto LPG as a clean fuel, ideal for Indian transportation sector. IAC is a member of “Central Motor Vehicle Rules - Technical Standing Committee” (CMVR-TSC), “Standing Committee on Emission Legislation” (SCOE), apex regulatory committees of Government of India. IAC’s membership comprises of the Govt. Oil Corporations (Indian Oil, Hindustan Petroleum, Bharat PetroIeum), global oil majors (Shell, Total Gaz, Chevron, Super Gas),major Indian Private LPG players (RIL, Aegis etc.) and all major Kit Suppliers, equipment manufacturers etc.
It is IAC’s endeavor to promote Auto LPG in the country through consistent dialogue with Government, OEs, regulators and all stakeholders to ensure the development of a sustainable auto LPG regime in the country.
Right to left, Apurva Chandra (Joint Secretary- Ministry of Petroleum & Natural Gas (Government of India)), GC Daga (Director –Indian Oil Corp Ltd), Brahm Dutt (Secretary, Ministry of Road Transport & Highways, Government of India), John Joseph (Sr Vice President, Reliance), Suyash Gupta (G. Secretary, IAC) & James Rockall, (Managing Director, World LP Gas Association) speaking at IAC annual conference on Auto LPG.
History
The foundation of the association was laid in Dec 2002, wherein US Department of Energy through its Clean Cities International program assisted a trade delegation on a 9 day whirlwind trip across India, wherein we met the oil marketers, transport authorities, vehicle manufacturers, regulators and numerous other stakeholders. By the end of this trip, a working group had been formed. From 2002 to 2004 IAC organized two major all-stakeholder meetings which were very well attended by the Industry players, after which on March 15, 2005, a fully fledged executive committee and office bearers, formally put a legal entity in place. Today, IAC is the only collective voice of auto LP GAS industry stakeholders in India.
What was IACs role in this transformation?
With more or less all major players offering LP Gas variants, the Indian marketplace which had been dominated by aftermarket conversions, shall sport a very different look in the future. IAC played a very important role in terms of helping to create an environment for vehicle manufacturers by advocating for the nationwide availability of Autogas. Through a constant dialogue with most of these vehicle manufacturers, we shared upcoming gas network, recommended usage of latest conversion technologies and offered to assist them wherever possible.
| Top 5 Priorities at IAC | ||
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2. Sensitize the government with autogas benefits by promoting it as environment friendly fuel. This also includes safety awareness campaigns, training, and workshops for State level officials. 3. Facilitate faster district level and highway approvals 4. Better enforcement of self discipline in after market conversions. 5. Continued support for vehicle manufacturers. | |
