The Government’s policy initiative in capping subsidised LPG cylinders for households, effective September last year, has led to a major churning in LPG marketing. It has not only brought down illegal diversion of the product, but it has also led to significant upswing in auto gas sales, said M. Nene, Chairman, IndianOil-Petronas Pvt Ltd.

Between September 2011 and February 2012, auto LPG sales went down by 1.5 per cent. However, during September 2012-February 2013, it posted a growth of 7 per cent, he said.

Crucial facility

Nene was here to inaugurate a 1.2-million tonne LPG storage terminal at Athipattu Village, near here. The Rs 500-crore project of IndianOil Petronas, a joint venture of Indian Oil Corporation and the Malaysian government-owned Petronas, would be a crucial facility to help maintain cylinder supplies to millions of households and commercial establishments in Tamil Nadu, Puducherry and parts of Andhra Pradesh and Karnataka.

Although the terminal was ready for commissioning by March, it could not be operated as a clearance from the Union Ministry of Environment was awaited.

On getting the CRZ (coastal regulation zone) clearance, which was required for a portion of pipelines connecting the jetty at the port and the terminal, IPPL got the consent to operate from the Tamil Nadu Pollution Control Board.

Talking about the demand and supply situation of LPG (liquefied petroleum gas), he said the demand for LPG imports will almost double in the next 10 years to meet the growing demand.


According to the current projections and taking into consideration the goals of the Vision 2015 document of the Union Government, the demand for LPG imports will reach 8 million tonnes by 2021 from the current 5 million tonnes a year. By that time, the domestic production of LPG is likely to cross 15 million tonnes a year from the current 9.5 million tonnes, said Nene.

He said with the current consumption of over 15 million tonnes a year, the Indian LPG market is the fourth largest, after the US, China and Japan.

According to him, following the Government’s commitment to achieve domestic LPG penetration of 75 per cent on a pan-India basis by 2015 (from around 50 per cent now), oil marketing companies are in the process of releasing 55 million new connections during this period. The current combined customer strength stands at 144 million.

LPG market

Indian Oil Corporation accounts for nearly half the LPG market in the country, with 734 lakh customers on its rolls as on date. Besides production of LPG from its 10 refineries, IOC owns and operates a six lakhtonnes a year LPG import facility at Kandla on the west coast.

(This article was published on April 2, 2013)
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