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US gas station to invest $5 mn in India

CleanFuel USA, one of the largest gas stations in US, has firmed up plans to set up 160 outlets by 2008 to tap the rising demand for LPG for automobiles.

india Updated: Apr 09, 2006 10:26 IST

CleanFuel USA, one of the largest gas stations in the US, has firmed up plans to invest $5 million in India to set up 160 outlets by 2008 to tap the rising demand for liquefied petroleum gas (LPG) for automobiles.

Cashing in on the growing demand for auto LPG, the Indian subsidiary of CleanFuel USA, one of the largest gas stations in that country, is planning to invest $5 million for setting up 160 outlets in the country by 2008.

"We are planning an initial investment of $5 million for 160 auto LPG refuelling stations in mainly Gujarat, Maharashtra, Madhya Pradesh, West Bengal and Punjab by 2008," Suyash Gupta, managing director of CleanFuel India, told IANS.

Having sent its representative to India as part of the official US Department of Energy delegation in 2002, the company set up operations in the country soon after the regulations were framed for use of auto LPG.

A leader in LPG dispensing equipment, CleanFuel's equipments have already been installed in few Indian cities, and running successfully over the past three years.

The company has been drawn to scale up its investments India because of the 300 percent growth in the off-take of auto LPG in 2005 over the previous year with a consumption of about 70,000 tonnes per annum.

Gupta, who is also the general secretary of the Indian Auto LPG Coalition, feels the sector holds potential to become a major business provided the oil companies become more proactive.

Currently, against 40,000 LPG refuelling sites worldwide, India only has around 150 sites.

The problem in India is auto LPG is not a major focus of oil marketing companies and there is also the large-scale, illegal use of highly subsidised domestic LPG for automobiles, despite being dangerous to do so, said Gupta.

"But if the retro-fitment is done well, an auto LPG-run car would be safer than vehicles run on petrol or diesel. Besides, auto LPG is less strenuous on the engine due to its lower emission," he said.

Cost wise too auto LPG at Rs.30 per kg is far cheaper than petrol, which costs around Rs. 49 per litre.

Compared to compressed natural gas (CNG), auto LPG is more expensive as it does not enjoy any subsidy. But for retro-itment, the cost of switchover to auto LPG is lower at around Rs.10,000, against Rs.35,000 for a CNG.

"In India, we are looking at B-Class cities as we plan to set up one-stop shops for both refuelling and retro-fitment next to it," said Gupta. In the US, the company is expanding its network from 44 stations to 104 by the yearend.

"Within next three months we plan to be in auto LPG business with 20 refuelling stations primarily on highways. We are in the process of finalising the sites in Gujarat, Maharashtra, Madhya Pradesh and Rajasthan."

The plan is to have at least five-seven dispensing stations in each city so that the customer is not put to hardship. To make the project more viable, it is also eying larger volumes on retro-fitment of trucks and buses, as in the US.

"We are planning to develop some heavy duty engines for busses and trucks to help them switch over to auto LPG," said Gupta.

For LPG supplies, CleanFuel has tied up with Dutch company SHV Energy India, which has two import terminals at Visakhapatnam and Porbandar. It is also in talks with Indian Oil Corporation for supplies at Haldia.

India based country coordinator of US Department of Energy's National Energy Technology Laboratory, the company is also looking into growth of alternate fuels like ethanol and bio-fuels.