IOC planning more LPG fuel stations

Vol 14, PW 4 (12 Aug 10) Midstream & Downstream
     

Private sector LPG players like Dutch operator SHV, Total of France and India’s Aegis, who sell LPG as car fuel mainly in south and west India, had better watch out! PETROWATCH learns state-owned IndianOil plans to maintain its dominance in the LPG car fuel market by adding 50 new stations this fiscal to the 277 stations it already operates in 150 cities.

LPG is up to 40% cheaper than petrol or diesel and can be used to fuel auto-rickshaws and cars. “We’re the biggest player in this area with a 36% market share,” boasts an IOC source.

“As of today, we sell 9000 tonnes every month.” He adds that IOC successfully set up 50 new stations in the last fiscal (2009-2010).

“Our target is to set up three to four stations every month this year,” he says. IOC sources LPG from its own refineries and transports it to stations in ‘bullet’ trucks.

This gives it an edge over private players like SHV, Total and Aegis, which are barred from selling Indian-produced LPG and must rely on expensive LPG imports. IOC’s main hurdle, we hear, is securing clearances in time to set up dispensing stations from state government and municipal authorities.

To avoid problems caused by delayed clearances, it prefers to sell LPG from its own petrol and diesel stations. “This saves time and money,” says IOC.

“It’s cheaper and quicker to install an LPG dispenser at one of our own petrol pumps. We only need permission to sell LPG.

” IOC believes competition from CNG is no threat to its LPG fuel expansion plans. “City gas distribution companies (who sell CNG) are active only in four to five cities right now,” says IOC.

Setting up a CNG station can take six months but LPG dispensers can be installed at (petrol and diesel) stations in less time.”