Despite the end-consumer being cushioned from the adverse effects of high international prices of auto LPG (ALPG), auto LPG players in India consider setting up new retail outlets in urban markets unviable. The reasons are the high cost of land and the stringent on- and off-site safety-distance norms laid down by the statutory authorities.
John Joseph, senior vice-president at Reliance Industries Limited and president of the India auto LPG Coalition (IAC), said, “More and more outlets are now coming up on the peripheries of cities and on highways, benefiting only the inter-city traveller.” There are around 760 ALPG dispensing stations (ALDS) across the country and these are expected to increase to 900 by March 2010, he added.
IAC, registered as a trust in New Delhi in 2005 with the aim of promoting LPG as an alternative, gaseous, environment-friendly transportation fuel, has over 40 member companies.
Until October 2008, Joseph explained, ALPG retail prices in India were linked to the international price of LPG. However, from November 2008, the oil marketing companies began linking the ALPG retail price in India to the retail price of petrol, thereby cushioning the customer from the adverse effects of high international prices of LPG.
V N Diwakar, vice-president (business development and special projects) of SHV Energy Private Limited (known for its Super Gas brand), the Indian subsidiary of the 11-billion euro Dutch company SHV Holdings, said that there are concerns in expanding the ALPG segment.