World LPG Association (WLPGA) recently organised a two day summit with a focussed theme of ‘LPG – Energy for Life.’ The event was jointly organised by the Indian oil marketing companies (OMCs) Indian Oil, Hindustan Petroleum and Bharat Petroleum together with the World LPG Association (WLPGA) and was the second edition of Asia LPG summit, firstly organised last year in 2017. The experts of the industry deliberated over a series of subjects including how India’s successful Pradhan Mantri Ujjwala Yojana can become a viable model for other countries to replicate, particularly those striving to provide clean cooking fuel to its people. “We are moving ahead in fostering regional cooperation by expanding the reach of LPG – together with countries like Bangladesh, Sri Lanka, Nepal and Myanmar we are working to make LPG more affordable, available, and accessible in the region,” said Shri Dharmendra Pradhan, Hon'ble Union Minister for Petroleum & Natural Gas, delivering the inaugural address.
Representatives from the industry discussed possibilities for LPG beyond its use as a cooking fuel as well as opportunities for expanding the autogas market in Asia. Several experts underlined the need to provide policy support to auto LPG (autogas), and help it become a viable transport fuel at a time when volatile fuel prices are exerting pressure on developing economies such as India. Autogas is cheaper and cleaner than conventional fuel and has high potential as it comprises only 1.7 per cent of total LPG consumption. An estimated 7 per cent of all vehicles, except for two-wheelers, run on autogas and has a high market potential.
PANEL DISCUSSION ON AUTOGAS
The summit also saw a panel discussion where industry experts delved upon the potential of AutoLPG as a fuel in automotive industry. Out of 26.8 million tonnes of LPG consumed in the world, the transport sector accounts for almost nine percent of the total demand and are available across 80 countries. Europe, Asia-Pacific and Russia/Central Asia account for almost 90 % of the global autogas demand where countries like Korea, Turkey and Russia consume over three million tonnes of LPG every year. However, the average growth rate of autogas since the beginning of the decade has been cold at three percent. It slumped further to one percent in 2017 and experts of the industry predict it to show almost similar pattern for 2018 data as well. This is because key markets for LPG consumption do not carry much room for growth and transport fuel demand in many developed countries is declining with energy efficient vehicles and people shying away from buying personal vehicles.
According to Michael Kelly, Deputy Managing Director at the WLPGA, electric vehicles are gradually becoming focus of both policy makers and vehicle manufacturers and there is direct correlation between EV demand and falling autogas demand in OECD. Even with countries like Japan where 90 % of the taxis operate on LPG, using autogas as the fuel in vehicles is witnessing turbulent times. It is growingly becoming expensive with conversion from gasoline car to LPG powered vehicle costing as high as $ 5000 and further poor investments in LPG station network has led to fall in demand from 1820 K tonne to 962L in 2017.
As Indian cities struggle to fight the growing air pollution levels, petrol and diesel are increasingly becoming non-sustainable as well. The auto LPG sector in the past few years has witnessed a steady growth in India, as more and more people opt for hybrid vehicles and gaseous fuels. As far as India is concerned, autoLPG registered 4.9 % growth in FY17. However poor investment in the infrastructure continues to be a deterrent in the growth autogas adoption as fuel. Suyash Gupta, Director General of the Indian Auto LPG Coalition (IAC), said unlike CNG, which requires creating extensive pipeline infrastructure, auto LPG can easily be transported even in trucks. Importantly, auto LPG can also be easily installed on two-wheelers which are among the major sources of dangerous emissions. He also called for Type Approval by agencies which come with prohibitive approval costs of as high as Rs 4 crores every three years. The Type Approval Validity must be made perpetual in line with European norms as there is absolutely no logic for the same vehicle to undergo the same cost prohibitive tests every 3 years, he added.