India – A Driver for India – A Driver for Asian LP Gas Demand Asian LP Gas Demand

GrowthGrowth

India – A Driver for India – A Driver for Asian LP Gas Demand Asian LP Gas Demand

GrowthGrowth

Alok Kumar GuptaAlok Kumar GuptaChief Manager – Business DevelopmentChief Manager – Business Development

Hindustan Petroleum Corporation Hindustan Petroleum Corporation LimitedLimited

Alok Kumar GuptaAlok Kumar GuptaChief Manager – Business DevelopmentChief Manager – Business Development

Hindustan Petroleum Corporation Hindustan Petroleum Corporation LimitedLimited

Overview of the PresentationOverview of the Presentation

•LPG Market in Asia

•Current LPG Supply & Demand

•LPG Demand Drivers in India

•LPG Demand Outlook

•Replicating demand drivers

Overview of the PresentationOverview of the Presentation

•LPG Market in Asia

•Current LPG Supply & Demand

•LPG Demand Drivers in India

•LPG Demand Outlook

•Replicating demand drivers

LPG Market Development in AsiaLPG Market Development in Asia

• Asia Pacific contribution to World LPG consumption is:• 40% in domestic sector

• 49% in industrial sector

• Rise in LPG demand from the domestic sector in the Middle East and Asia

• Bottled LPG remains the most widely used method

• Demand rising from the transport sector (autogas) in Asia-Pacific

• LPG is fast replacing wood and dung resulting in reduction of adverse climate effects

• Rise in Population and change in lifestyle - provides a significant opportunity for LPG

India & China are amongst Top 10 Producers & Consumers of LP Gas in World

Overview of the PresentationOverview of the Presentation

• LPG Market in Asia

• Current LPG Supply & Demand

• LPG Demand Drivers in India

• LPG Demand Outlook

• Replicating Demand Drivers

LPG Demand in AsiaLPG Demand in Asia

Asia: Moderate Demand Growth in LPG to Continue through 2015

• Strong growth in LPG demand in Asia & Middle East

• Asia is largest LPG consuming region in the world and is still expanding

• Asia is largest user of LPG for residential & Industrial applications

• Asia has the largest growth potential in the end use sector

LP Gas Consumption- Million MT

LPG Production in AsiaLPG Production in Asia

Rise in LPG Production in Asia- New refining Capacity

• LPG Production is increasing in China & India

• Regional LPG supply has already increased by nearly 10 MMTPA since 2000

• LPG supplies should increase by another 9 MMPTA in Asia by 2012 (average growth of 4%/year)

LP Gas Production- Million MT

Current Scenario in IndiaCurrent Scenario in IndiaDemand & Production

2004-09 Sources of Bulk LPG

865

1491

2217

2453

1981

2583 2592

0

500

1000

1500

2000

2500

3000

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Import Growth (TMT) Source Countries

India is fourth largest consumer of LPG in the world

Overview of the PresentationOverview of the Presentation

• LPG Market in Asia

• Current LPG Supply & Demand

• LPG Demand Drivers in India

• LPG Demand Outlook

• Replicating Demand Drivers

Demand Drivers in IndiaDemand Drivers in India

• Indian Economy• GDP Growth• Increase in Per Capita Income• Focus on Infrastructure Development

• Social Environment• Growth in Population• Increase in Literacy• Women Empowerment

• Focus on Rural India• Penetration of LPG• Vision 2015- MOP&NG• Govt. Policies & Public Schemes

• Concerns & Regulation on Climate Change• Transportation sector• Industrial sector

Indian EconomyIndian Economy

GDP Growth In India

Per Capita Income

Gross Domestic Product• Maintaining Growth

in spite of slowdown

Per Capita Income• Highest ever growth

in 2008-09 (14.4%)• Per capita income in

2008-09: US$780

Infrastructure• Highways: Allocation

for NHDP raised 23%• Focus on housing &

basic amenities to urban poor

Driving Demand for cleaner fuel i.e. L P Gas

Demand Drivers in IndiaDemand Drivers in India

• Indian Economy• GDP Growth• Increase in Per Capita Income• Focus on Infrastructure Development

• Social Environment• Growth in Population• Increase in Literacy• Women Empowerment

• Focus on Rural India• Penetration of LPG• Vision 2015- MOP&NG• Govt. Policies & Public Schemes

• Concerns & Regulation on Climate Change• Transportation sector• Industrial sector

Social EnvironmentSocial Environment

Literacy Rate In India Population• Second most populous

country with 1.6% annual growth

• 70% people live in rural areas

Literacy Rate• Female literacy rate during

the period 1991-2001 increased by 14.87% (54.2%) against 11.72% (75%) in male literacy

• Imparting functional literacy to females through National Literacy Mission:

• Gender Equity and Women Empowerment• Heightened Social Awareness• Increased School Enrolment• Household Savings and access to credit• Health and Hygiene

Driving Demand: Awareness in females on Clean & Convenient fuel

Demand Drivers in IndiaDemand Drivers in India

• Indian Economy• GDP Growth• Increase in Per Capita Income• Focus on Infrastructure Development

• Social Environment• Growth in Population• Increase in Literacy• Women Empowerment

• Focus on Rural India• Penetration of LPG• Vision 2015- MOP&NG• Govt. Policies & Public Schemes

• Concerns & Regulation on Climate Change• Transportation sector• Industrial sector

Penetration of LPGPenetration of LPG

UrbanUrban RuralRural TotalTotal

Population March 2009 in Million

326.2 838.8 1165

Households in Million 93.1 156 249

LPG connections as of 01.04.09 in Million

79.2 26.5 105.7

Penetration 85% 17% 42%

Per capita consumption (Kg/year)

128 83 117

Huge Potential in rural areas- needs to be tapped

Vision 2015 & Govt. PoliciesVision 2015 & Govt. Policies1.New LPG Connections:

• Increasing LPG customer population from 107 millions to 160 millions by 2015

• Raise population coverage from 57% to 75%

2.Common LPG Kitchen:• Opening up in all villages with population >

5000 as a part of Corporate Social Responsibility (Rasoi Ghar)

Govt. Policies & SchemesGovt. Policies & SchemesMeasures-Focus on Rural Areas

• Direct subsidy to farmers• Extension of Debt waiver • Allocation under NREGA increased by 144%

(NREGA-National Rural Employment Guarantee Act)Additional 4.0 MMT LPG demand in Domestic Segment by 2015

Demand Drivers in IndiaDemand Drivers in India

• Indian Economy• GDP Growth• Increase in Per Capita Income• Focus on Infrastructure Development

• Social Environment• Growth in Population• Increase in Literacy• Women Empowerment

• Focus on Rural India• Penetration of LPG• Vision 2015- MOP&NG• Govt. Policies & Public Schemes

• Concerns & Regulation on Climate Change• Transportation sector• Industrial sector

Regulation on Climate ChangeRegulation on Climate ChangeTransportation Sector

• Efficient and Cleaner Road Transport

• Euro IV Standards

• CNG for all public transport

• Auto LPG

Industrial Sector

• Sectoral Initiatives taken by Govt. of India to achieve Kyoto Protocol objectives

• Reduction of gas-flaring, installation of waste heat recovery systems, energy audits, etc.

• Energy conservation in industrial sector has been promoted in steel, cement, paper, caustic soda, brick & aluminum sector.

• Stricter pollution control norms propagating use of efficient fuels Additional Demand of 1 MMT in industrial sector by 2015

Overview of the PresentationOverview of the Presentation

• LPG Market in Asia

• Current LPG Supply & Demand

• LPG Demand Drivers in India

• LPG Demand Outlook

• Replicating Demand Drivers

LPG Demand Outlook-IndiaLPG Demand Outlook-India

LPG Demand Projections

•XI plan – CAGR 4% (2007-12)

•XII plan – CAGR 5.8% (2012-17)

•Asia Pacific Databook I – CAGR 6%

LPG Supply Outlook

• 2012-13 – Supply equals projected demand

• Grassroot refineries at Paradip, Bina & Bhatinda – 1740 TMTPA

LPG Demand-Industry

Expected Demand by 2015: 15.9 MMT

Industry Demand at 2015 Domestic : 13.5 MMT Industrial : 2.3 MMT

Industry Demand at 2010 Domestic : 11.1 MMT Industrial : 1.1 MMT

Overview of the PresentationOverview of the Presentation

• LPG Market in Asia

• Current LPG Supply & Demand

• LPG Demand Drivers in India

• LPG Demand Outlook

• Replicating Demand Drivers

Asia- Replicating Demand DriversAsia- Replicating Demand Drivers

Demand drivers can be replicated in countries where:

•Human Development Index is more or less similar

•GDP per unit of energy is comparable to India

• %age of urban population is comparable

•Per Household LP Gas consumption in domestic sector is low

Rasoi Ghar- An Unique InitiativeRasoi Ghar- An Unique Initiative

• A pioneer initiative by HPCL for promoting use of LPG in rural India

• Provides low cost cooking for users with

• Nil initial investment• Cook and Pay

• Reduce Deforestation• Concept based on

community kitchen• Increases awareness of

LPG as convenient fuel• More than 1450 Rasoi

Ghars across India• Approx. 18000 families

getting benefited

Results in villagers taking individual LPG connections