Petrol de-regulation works to the advantage of auto LPG industry | business | Hindustan Times
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Petrol de-regulation works to the advantage of auto LPG industry

Following the de-regulation of petrol price, auto LPG, the greener and cheaper fuel is quietly making inroads in the auto fuel market. Manu P. Toms reports.

business Updated: Jul 27, 2011 22:54 IST
Manu P. Toms

Following the de-regulation of petrol price, auto LPG, the greener and cheaper fuel is quietly making inroads in the auto fuel market. As the price of petrol has shot up to Rs 65-68 per litre, auto LPG, which gives comparable mileage at Rs 39-42 per litre, offers about 40% cost savings.

Thanks to policy initiatives by some cities to reduce atmospheric pollution, auto LPG has become a mandatory fuel for three-wheelers and taxicabs in several places.

"Auto LPG is now available in more than 1000 stations in 450 cities across India," Suyash Gupta, General Secretary, Indian Auto LPG Coalition, told HT.http://www.hindustantimes.com/Images/HTEditImages/Images/28_07_11-buss23d.jpg

Auto LPG sales has crossed 3,50,000 tonnes in India in last fiscal, the highest ever since LPG was permitted as an auto fuel in the country in 2000. “If the illegal diversion of cooking gas for automotive usage is stopped, the sales would easily cross a million tonnes,” said Gupta. India is estimated to have 1.6 million vehicles run on auto LPG.

The oil marketing companies are interested in auto LPG as they need not bear the subsidy cost. (Auto LPG price in India is linked to the international price of natural gas and is revised monthly based on import parity price) Indian Oil Corporation alone has 315 auto LPG outlets while Reliance Industries has 127 dispensing stations.

Although LPG now accounts for just 2% of the total auto fuel consumption of Indians, the policies adopted by a few cities hold some promise for this auto gas. In Bangalore there are 90,000 LPG auto rickshaws and in Pune 10,000 rickshaws are run on LPG.

In cars, almost a dozen models — including three from Maruti, two each from Tata Motors, Hyundai and GM — have R35,000-40,000 costlier LPG variants; GM’s LPG Beat is the latest among them.