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SHV Energy Pakistan HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE 25 th March 2010, Islamabad SOHAIL A. QURAISHI CHIEF EXECUTIVE.

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Presentation on theme: "SHV Energy Pakistan HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE 25 th March 2010, Islamabad SOHAIL A. QURAISHI CHIEF EXECUTIVE."— Presentation transcript:

1 SHV Energy Pakistan HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE 25 th March 2010, Islamabad SOHAIL A. QURAISHI CHIEF EXECUTIVE

2 SHV Energy Pakistan LPG GLOBAL MARKET Total Size of World Market: –Year Million Tons –Year Million Tons Total Size of Pakistan Market –Year Sales was 570,000 Tons –This is 0.25% of World Market –It is at a low level of 2.6 Kg/Capita

3 SHV Energy Pakistan LPG Per Capita Consumption (Kg)

4 SHV Energy Pakistan GLOBAL LPG PRODUCTION TRENDS Million Tonnes

5 SHV Energy Pakistan GLOBAL LPG CONSUMPTION TRENDS Million Tonnes

6 SHV Energy Pakistan MAJOR LPG EXPORTERS Major LPG Exports are from Mid-East –In Year Million Tons –In Year Million Tons Global Consumption in Year 2012 is 267 Million Tons A surplus of 3 Million Tons is expected in Mid-East

7 SHV Energy Pakistan MAJOR LPG EXPORTERS Million Tonnes

8 SHV Energy Pakistan GLOBAL CONSUMPTION BY SECTOR Domestic and Commercial46% Feedstock32% Transport9% Industry11%

9 SHV Energy Pakistan Global Consumption by Sector 2008

10 SHV Energy Pakistan PAKISTAN LPG MARKET Total Market is Contracting –(23%) over last four years No. of Marketing Companies has grown –From 16 in 2004 to 83 Now (Increase of +500%) Major Conversion of Auto Market to CNG Smuggling of Substandard LPG from Iran/Turkmenistan etc.

11 SHV Energy Pakistan LPG Sales Volume (*) Annual projections based on Jul-Dec09 volume – 250 K (*)

12 SHV Energy Pakistan Low Level of LPG Imports ( )

13 SHV Energy Pakistan REASONS FOR LPG MARKET CONTRACTION CNG Market Expansion NG Expansion in Domestic Market –4 Million Consumers in Year 2004 –5.6 Million Consumers in Year 2009 Lack of Investment in Cylinders in LPG Downstream Market Imports Uneconomic and Uncompetitive Decline in local LPG Production

14 SHV Energy Pakistan Auto Fuel Comparison Data based on commonly used kits for use in 1000 CC Car

15 SHV Energy Pakistan GOP POLICY CHANGES TO GROW THE BUSINESS Import Parity Pricing thru reduced GST both at Import & Supply Stage (No Revenue Loss to GOP due to higher imports) –To allow all players to have adequate volume –To control prices through competition Clear Policy on Comparative Fuel Taxation and Pricing Legislate against cross-filling of Cylinders Controls on Smuggling of LPG

16 SHV Energy Pakistan LPG Competitiveness with Other Fuels Fuel Prices as at 3 rd March2010

17 SHV Energy Pakistan OGRA REQUIRED INITIATIVES A LPG Consumer requires a safe, economic and correctly filled cylinder. For this: Cylinder Cross-filling needs to be stopped by linking Company sales to stock of cylinders available* Correct LPG weight is filled Ban on Manufacture and Sale of small non-company owned cylinders Re-qualification of cylinders Control Sub-standard LPG Smuggled from Iran/Turkmenistan etc Control Decanting *For current market conversion to domestic from Auto about 3 Million more cylinders are required costing 5.5 Billion Rupees

18 SHV Energy Pakistan LPG SAFETY Compliance to Codes & Standards throughout the Distribution Chain –Pressure Vessels to be manufactured with prescribed steel only –Use of genuine UL Listed valves only for LPG Plants / Vessels LPG Tankers to comply with International standards like ADR, COP2 and BS 7122 etc. Re-qualification of all LPG Vessels (Both Static / Mobile) to be carried out only by API 510 certified inspector. 3rd Party Inspection Bodies with foreign accreditation Only certified inspectors to be authorized by OGRA for inspection of pressure vessels.

19 SHV Energy Pakistan Recommendations To Grow the LPG market, support from Government and Regulator is required for: –Increased LPG supplies thru imports by rationalizing GST structure –Safety Implementation throughout the LPG distribution chain –Clear Policy on Tax/Price on different fuels to allow investment by companies –Control Smuggling


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