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Developing the Autogas Industry Presented by Belal Jabbar CEO 5 th LPG Conference, 2011 NOOR LPG.

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Presentation on theme: "Developing the Autogas Industry Presented by Belal Jabbar CEO 5 th LPG Conference, 2011 NOOR LPG."— Presentation transcript:

1 Developing the Autogas Industry Presented by Belal Jabbar CEO 5 th LPG Conference, 2011 NOOR LPG

2 Outline to the Presentation Introduction to NOOR LPG Why Autogas? Pakistan’s First Autogas Station Our Experience Obstacles to Growth The Way Forward

3 NOOR LPG was incorporated in 2003 and began commercial operations a year later. In 2010 it set up Pakistan’s first Autogas Station Presently it has a network of 100 plus distributors spread across the country. It markets LPG from 8 different LPG Storage and Bottling Plants. The Company has a dedicated fleet of LPG Bowzers.

4 Why Autogas? Available Affordable Acceptable

5 Available The use of LPG as an automotive fuel has thrived due to its availability in all major urban cities. Recent shortfall in local production has been met through increased imports. With the commissioning of BYCO’s second refinery the availability is expected to increase by 400 tons per day. OGDCL Fields too have the potential to produce an additional 500 tons per day. LPG is therefore expected to remain available!

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7 Affordable FuelDistance (km) Petrol156 Diesel160 LPG210 LPG is cheaper than petrol and diesel. Average distance covered per vehicle in Rs Autogas is 30% cheaper than Petrol !

8 Acceptable Autogas is a powerful fuel. It has been readily accepted due to its superior performance and drive. Autogas is an environment friendly fuel and its use is advocated by Governments worldwide. Furthermore conversion cost which in many cases is a prohibitive cost is far lower than CNG conversions. A typical conversion cost for a Rickshaw including kit and cylinder is Rs and Rs for a car.

9 Pakistan’s 1 st Autogas Station

10 Our Experience As anticipated our Principal users are Rickshaws that account for nearly 80% of the sale. Four wheel conversions have been slow. Car owners are reluctant to switch due to unavailability of other stations; similar to what the CNG Industry experienced in the early 1990’s. During peak winter months, Toyota Hiace Vans were fitted with LPG cylinder and kits due to shortage of CNG.

11 All conversions are as per OGRA’s prescribed standards. Autogas cylinders are available in sizes ranging from 4-40 kg. An installment plan was adopted for Rickshaw operators. These rickshaws have always returned for refillings. All vehicles retrofitted at the Station carry a LPG sticker.

12 Sales at our Station As per prevailing practice of decanting market, we first tried to sell Autogas in kilos. However despite maintaining prices lower than that of decanters, response was slow. Thereafter sale price was converted to liters. Rs. 55 per liter had a far greater appeal than Rs 98 per kilo! Daily consumption is presently 0.3 tons per day and will increase once other stations are set up.

13 Status of Autogas Stations 28 Provisional Licenses have been issued by OGRA for construction of Autogas Stations Pakistan State Oil is also in the process of establishing LPG dispensing facilities on its sites. CompanyLicenses Issued Admore Gas01 Askar Oil Services 04 Blessing Gas01 Byco Petroleum04 Hascol Petroleum 02 Madni Gas02 Petrosin01 Progas07 Wak Gas05 Yasin Akram01

14 Ministry of Petroleum and OGRA have accepted a number of changes as requested by the LPG Association of Pakistan including: (i) Allowing 3 wheelers to be refueled. (ii) Doing away with minimum area requirement of 10,000 square feet. But what is stalling the growth?

15 1. Price Instability 2. Ambiguity in Rules issued by Explosives Department and OGRA 3. Lack of Incentives

16 What do we need to move ahead from here?

17 From the Regulator 1. A one window solution for obtaining licenses and NOC’s. 2. The Regulator needs to implement quality checks on the product itself to ensure that sub standard LPG is not filled. 3. A minimum distance between Autogas stations needs to be determined and licenses to only be issued thereafter. Allowing Autogas stations to be established in close proximity to one another will have adverse consequences as experienced by the CNG industry.

18 From the Ministry of Petroleum/GOP 1. Clarity in Rules- Explosives vs. OGRA 2. Incentives to encourage the use of LPG as Autogas: (i) Waiver of GST at the Pump (ii) Incentives for converting vehicles- Tax rebate/Exemption of Motor Vehicle Tax. (iii) Duty Free Import of kits, LPG cylinders for vehicular use and storage tanks for Autogas Stations.

19 From the Private Sector Support from OEM’s- particularly manufacturers of 3 wheelers. This has proven to be of tremendous help to the CNG Industry. Promotional Campaigns for Autogas-the LPG Industry needs to effectively communicate the advantages of LPG over other fuels including CNG. Development of Infrastructure to stabilize prices.

20 Conclusion  Additional production of LPG will boost the market for Autogas.  Natural gas shortage has badly affected the popularity of CNG and presently there is a moratorium on the construction of new CNG stations.  An opportunity exists for CNG stations (having sufficient land) to install LPG dispensing facilities on their sites. This is a win win for both the industries.  The LPG Industry must work closely together to develop and promote Autogas.

21 THANK YOU


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