Lpg segment

Indian LPG Industry

By:Priyanka Yadav (411)Sumana Sinha (449)Mansi Ahuja (429)Venkateswarlu A (423)

Overview of Presentation

Indian LPG scenario

Case description

Question no-1

Question no-2

Conclusion

Gp No-1 Indian LPG Industry 2

Indian LPG scenarioLPG Marketing Commenced in India in 1955

Started by Burmah Shell in Mumbai LPG was initially used mainly for the purpose of

cooking State Owned Enterprises (SOEs) commenced

LPG distribution in 1965Later LPG also marketed for following purposes

Non Domestic LPG Industrial Bulk Transport (Auto LPG)


Indian LPG scenario contd…Domestic LPG is primarily being sold at

subsidized prices Private Enterprises also entered but mainly in

other than domestic segmentThe household sector consumes about 90% with

the remaining 10% diverted to industrial and other uses


Case descriptionLPG was introduced in India as a domestic fuel in the early 1960s. Government-owned corporations handled the production and marketing of LPG until the economic reforms of the early 1990s. As a part of liberalization process in the early 1990s, the Indian govt opened up the LPG business to private entrants in 1993. To provide a legal framework to regulate private entrants, the government implemented the LPG order in 1993. This order enabled private marketers to import, store, bottle and market LPG at market determined prices. There are many challenges faced by a private entrant in the LPG segment. The most difficult challenges is to break the monopoly of public sector companies. As long as the govt subsidizes public sector companies and private companies have to pay high import duties, private entrants will find it very difficult to establish themselves in the LPG market.

Suppose a multinational company wants to enter the LPG market. It consults a marketing research firm to aid this. As a research analyst of the firm:


Question - 1


Prepare a detailed report using descriptive statistics on the marketing aspects of LPG

Types in Statistics

• Descriptive Statisticsis the process of describing data and trying to reach a conclusion based on

it• Inferential Statistics

is a scientific procedure to make inferences about a population based on a sample


Segments of Indian LPG industry

o Domestico Non Domestico Industrialo Transport


From the Pie chart diagram we can conclude that the major segment is Domestic and followed by Non Domestic, industrial and Transport

Region wise Market Share of LPG industry


From the Pie chart diagram we can conclude that the North region is having highest market share and East region is having lowest market share

34

30

24

12

Share %

WestNorthSouthEast

Market growth rates of the LPG industry

1990-91 to 1996-97

1996-97 to 2001-02

2001-02 to 2006-07

2006-07 to 2009-10

2009-10 to 2014-15

0

4

8

12

16

20

5.3

18.6

10.2 10.4 10

Market growth


From the above line graph we can conclude that the market growth has substantially increased from 1990 to 2002 after that it is increasing on average of 10%

Customer strength in Domestic segment grew from 10 mill (1985-86) to 166 mill (2013-14)

Market growth rates of the LPG industry


Consumption increased from 1.2 MMT in 1985-86 to 15.9 MMT in 2013-14

LPG Supply Demand – Present Situation


Sourcing of LPG : Trends


LPG Supply Demand – Future Outlook


GDP from Petroleum Sector

2005-06 2006-07 2007-08 2008-09 2009-10 2010-110.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%2.85% 2.91% 2.82% 2.72%

2.35% 2.40%

GDP

GDP


Competitors

Players in Indian LPG Industry

The major players in LPG marketing are 3 State Owned Enterprises (SOEs) Indian Oil Corporation Ltd (IOCL) Bharat Petroleum Corporation Ltd (BPCL) Hindustan Petroleum Corporation Ltd (HPCL)

Private Enterprises (PE) Aegis Gas Aegis Logistic Indian Oil Petronas Pvt. Ltd (IPPL) Reliance Industries Ltd (RIL) SHV Energy SHV LPG TOTAL Oil India Pvt. Ltd Hindustan Aegis


37.3

36.6

12.4

8.05.8

Market Share

ONGC

RIL

IOCL

BPCL

GAIL

Market share of key competitors

ONGC RIL IOCL BPCL GAIL0

50000

100000

150000

200000

250000

300000271893 266717

90077

5809942229

Market Capitalization


Commercial and Industrial sales


04-05 05-06 06-07 07-08 08-09 09-100

200

400

600

800

1000

1200

1400

353.1446

653.3831.6

963.5

1158.2

Sales in TMT

Sales in TMT

Suggestion to Foreign Entrant


Heavy subsidy on domestic LPG creates a no entry

for any private player

For a foreign entrant there is great scope in the non-

subsidized commercial and industrial section

An auto gas (LPG) is a cost efficient fuel and holds

scope for the private players as it is not subsidized

Question - 2


Specify the kind(level) of data with regard to the ranking of lead players in the market as shown in following table

Company Share (%)

IOCL 40

HPCL 20

GAIL 13

ONGC 12

BPCL 11

Others 4

Levels of Data Measurement


Nominal Level: When data are labels or names used to identify elements.

Ordinal Level: Here, labels also signify rankings.

Interval Level: The difference between two consecutive numbers counts as well.

Ratio level: In addition to the properties of interval level, ratio is also meaningful.

Levels of Data Measurement


By analyzing the above table, we find that the data is given in Interval Level

Company Share (%)

IOCL 40

HPCL 20

GAIL 13

ONGC 12

BPCL 11

Others 4

Question - 3


Take a proportionate sample from four regions of the country and through a well structured questionnaire , highlight the positive and negative features of the products and services existing in the market

Steps in Sampling

Target population must be defined

Sampling frame must be determined

Appropriate sampling technique must be selected

Sample size must be determined

Sampling process must be executed

Stratified Random Sampling

In stratified random sampling, elements in the population are divided into homogeneous groups called strata. Then, researchers use the simple random sampling method to select a sample from each of the strata.

Homogenous Data


Area No of Customer

Saket 10000

Sangam Vihar 15000

Malviya Nagar 16000

Khanpur 20000

Conclusion

At present, Indian LPG market is government

dominated and degree of competition is very low. Cost

of domestic LPG is subsidized while for commercial and

industrial, its market determined. The ratio of

customers of domestic and non-domestic LPG is 9:1.

Demand for LPG is growing at a rate of 6% per annum

where as supply is not constant and gap is filled by

imports.Gp No-1 Indian LPG Industry 28

Date post:	16-Jan-2017
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Lpg segment

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