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COMPANY PROFILE
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stablished in 1998 Bhiwadi Cylinders Pvt. Ltd. (BCPL) today is an ISO 9001 : (Single solid line, Auto, 0.5 pt Line width), Right: (Single
solid line, Auto, 0.5 pt Line width, Margin: 31 pt Border
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2008 company and one of the largest cylinder manufacturers in India, having an

annual production capacity of around one million cylinders with manufacturing

unit located at Bhiwadi, 70-kms from the National Capital, Delhi (India).

BCPL is one of the major cylinder suppliers to the leading public sector LPG

marketing companies in India like Indian Oil Corporation Limited, Bharat

Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited and

have so far supplied nearly one million LPG cylinders to these marketing

companies. It also produces refrigerant cylinders (non-refillable and refillable),

stainless steel cylinders for special applications, automotive LPG cylindrical and

toroidal tanks in various sizes and capacities. Apart from this BCPL is also

engaged in the manufacturing of multi-function valves used in automotive

applications onboard for LPG. The same section is producing LPG cylinder valves

and valves for disposable cylinders.


BCPLs manufacturing facilities are approved by Standard Organization of Nigeria

(SON) and Kenya Bureau of Standards (KEBS). Its products have the certification

of conformity from M/s Intertek (India).

The emphasis of the company is always on delivery of the products, meeting

international quality standards at the lowest possible cost. For this, continuous

training is imparted to its employees from time to time and high level of

motivation is maintained. The result of this teamwork is visible in the product

which speaks for its quality

With its diversified commitments to the national and international standard /quality

and safety BCPL is most trusted name in the industry today but for us at BCPL

there is no time to rest, as many more milestones are yet to be achieved.


LPG CYLINDER Formatted: Font: Bold, Underline, All caps
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manufacturing unit at bhiwali cylinder pvt.ltd. is involved in producing high Formatted: Line spacing: Double

quality two and three piece and welded LPG gas cyclinders.the manufacturing

process employee some of the most modern machinery and testing technology

which are in accordance with india,british,iso,dot standards,based on customer

requirements.

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TOROIDAL AUTO TANK

Available in capacities 28 ltr. and 34 ltr.

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CYLINDRICAL AUTRO TANK

ompany is one of the largest manufacturers of Auto Gas containers in India

producing various sizes of Auto LPG cylinders duly approved by Petroleum and

Explosives Safety Organisation and Bureau of Indian Standards.


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Available in capacities

5 ltrs., 8 ltrs., 15 ltrs., 25 ltrs., 50 ltrs., 60ltrs. and 75 ltrs.

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Two Wheeler Tank

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25 Ltrs

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50 Ltrs

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60 Ltrs

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MULTI FUNCTION VALEVES
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Company manufactures multivalves for cylindrical and toroidal Auto LPG tanks. Formatted: Line spacing: Double

These multivalves are manufactured as per international quality standards.

Available in Liquid / Vapour withdrawal models

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LPG CYLINDER VALVES
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20mm Self closing valve 25mm Self closing valve 27mm Self closing valve Formatted: Line spacing: Double

with safety relief with safety relief with safety relief

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22mm Self closing valve 25mm Self closing valve Formatted: Line spacing: Double

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CERTIFICATION & STANDARD

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Bureau of Indian Standards Department of Explosives ISO 9001:2008 Certificate Formatted: Line spacing: Double
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The Automotive Research US Department of Kenya - Pre-Export Formatted: Line spacing: Double
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Association of India Transportation Verification of Conformity Field Code Changed


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Standard Organization of European Certification for European Certification for Formatted: Line spacing: Double
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Nigeria LPG Cylinders Helium Cylinder

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CLIENTALE

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Indian Oil Corporation Hindustan Petroleum


Bharat Petroleum
Ltd. Corporation Ltd.
Corporation Ltd.

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Navin Fluorine
Chemplast Sanmar Limited SRF limited
Limited

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Unitax Gas Equipment Lomani Auto Gas Refex Refrigerants Ltd.

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AARDING Gorkhram Haribux HOVEL AUTOGAS


OVERSEAS CLIENTS (BY COUNTRIES)

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Tanzania Chad United Kingdom Formatted: Line spacing: Double

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NIGERIA MOZAMBIQUE Formatted: Line spacing: Double

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INTRODUCTION color: Text 1, All caps
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LPG i.e. Liquefied Petroleum Gas is a mixture of Propane and Butane and with Formatted: Font: 14 pt, Font color: Text 1
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tertiary gases. In India, distribution of LPG began with Burma Shell Corporation in

1955. It started as an alternative to the then popular fuels of India, Coal, Kerosene,

wood and Dried Dung Cake. As per its prices, it was not feasible even to the then

middle class to shift to LPG. So, Govt promoted LPG by providing subsidy during

connection and later on base of per unit of gas. Govt Policy acted as a spark to the

fuel. No sooner, there was a long list of applications for registration of connection.

Oil companies had not planned for such demand in terms of cylinders, gas and

distribution points. Slowly, mass production of gas cylinders started in India with

rising imports of LPG from middle-east countries and that lead to easing the supply

demand gap.

LPG in itself is largely a mixture of Propane and Butane with a high calorific value

of 50,350 kJ/kg and 49, 510 kJ/kg. This differentiation leads to difference in LPG

supplied to Industrial and Domestic Sector. Industrial is 70% propane and 30%

butane whereas for domestic the values reverse as 30% propane and 70% butane.

This value varies with season as well; in winter, its more propane and in summers,

its more of butane.

In India, LPG finds is prime usage in Domestic sector with 92.3% consumption in

households. 3.4% in commercial sector and 2.4% as Auto LPG and 1.9% in
Industry. In 2001, 17.5% of the households using LPG used it as their primary

cooking fuel though the share of firewood as primary fuel was 52% and 10% each

on Crop Residue and Cow dung Cake.

Currently, the LPG business is fragmented in two parts: Industrial & Commercial

LPG and Subsidised Domestic LPG. Both businesses run on base of understanding

& regulation. Industrial & Commercial LPG is a more competitive business

segment than the Domestic LPG as it has competition between OMCs and PMCs

together. In Domestic LPG, only OMCs operate and competition is largely limited

by dividing boundaries of area for distribution of LPG. Formatted: Font: (Default) Times New Roman, 14 pt, Font
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LPG IN INDIA OVERVIEW Formatted: Font: Times New Roman, 16 pt, Underline, Font
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LPG in India is largely a regulated market. Pricing and allocation of Distribution Formatted: Font: 14 pt, Font color: Text 1
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joints is decided by corresponding bodies. Demand for LPG in the Year 2007-08

was 10178 TMT corresponding to supply level of 11, 278 MMTPA. This supply

consisted of 55% from PSU OMCs, 25% from Essar & RIL and remaining 20%

from imports. In the year 2004-2008, demand stood at 90-95% of Supply. On

January 1, 2007 there were 181 bottling plants across India 49% owned by IOCL,

27% by BPCL & NRL and 23% by HPCL. Bottling plants had a capacity of

bottling 8987 MMTPA as on April1, 2009. There were 9366 distributors of LPG

on the same date with 73% presence in urban area and 12.5% each in Urban/Rural

and Rural area. Demand for LPG is growing at a rate of 6% per annum whereas

supply is not constant and gap is filled by imports.

The LPG being distributed is in 4 cylinder sizes. Domestic Cylinder: 5 kg & 14.2

kg, Commercial Cylinder: 19 kg and Industrial Cylinder 35 kg. LPG for Domestic

customers is supplied at a subsidised rate and for industrial & commercial rate is

market determined. This difference in pricing scheme often lead to black

marketing but companies are now a days vigilant enough to inhibit this practice.

HPCL as a pioneer is including GPS device in its cylinders to restrain the

fraudulent practice.
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MAJOR PLAYERS caps
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In India, share of LPG retailing largely depends on the LPG producing capacity of Formatted: Font: 14 pt, Font color: Text 1
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its refineries. IOCL has the highest number of refineries and largest capacity for

producing LPG. It leads the market with 49% share, 27% by BPCL & NRL, and

23% by HPCL. In the PMCs, major players are RIL and Essar. These two

companies generate 90-95% of their revenue from the Commercial and Industrial

segment. The combined LPG producing capacity of RIL & Essar is 3% of the total

indigenous LPG production capacity of India.

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Understanding LPG Supply Chain

Procurement Formatted: Font color: Text 1

In India, LPG is either imported from outside or is produced as a by-product in the Formatted: Font: 14 pt, Font color: Text 1

refineries and petrochemical plants. Imported LPG arrives at the countrys ports by

help of LPG tanker ships.


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STORAGE caps
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From both, the ports and the refineries, LPG is brought to the large storage Formatted: Font: 14 pt, Font color: Text 1
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facilities with the use of pipelines. Here the LPG is stored under highly refrigerated

and pressurised condition.

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Pipeline color: Text 1
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Pipeline
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Oil Refinery

Distribution and Retailing Formatted: Font color: Text 1

From the storage facilities, LPG is directly distributed to bulk industrial purchasers Formatted: Font: 14 pt, Font color: Text 1

via large bulk road tankers. For the domestic customers, LPG is distributed in

packed form through dealers. Dealer holds the stock of filled cylinders. When the

customers LPG cylinder is emptied, it is replaced by the local operating dealer at

the customers location itself. The dealer recovers the cost of transporting cylinders

from commission on a per refill basis. A group of dealers in a given area receive
the filled cylinders from the designated bottling plant. A dealer sends the empty

cylinders to the required bottling stations via truck. These bottling plants take back

the empty cylinders and load the truck with the filled ones. The filled cylinders are

then sent back to the dealer. The various bottling plants in turn receive the LPG

from storage facilities with the use of tankers. The tankers are dedicated to

transporting LPG, and hence, the company pays the transporters for both delivery

and return trips to the storage facilities. Formatted: Font: (Default) Times New Roman, 14 pt, Font
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Tanker Double
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Cylinder Distribution

Tanker
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LPG MARKETING color: Text 1, All caps
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Till September, 1993 LPG was being marketed in the country by the Public Sector Formatted: Font: 14 pt, Font color: Text 1
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Oil Marketing Companies (OMCs) only. Since LPG was under short supply,

OMCs were importing the product to meet the requirements. However, inadequate

import infrastructure coupled with limited allocation of Foreign Exchange at

official rates made it difficult for OMCs to import LPG and meet the full demand.

In order to overcome this difficulty, Government issued a notification, dated 3rd

August, 1993 introducing the concept of Parallel Marketing Scheme (PMS).

Under PMS, parallel marketers (private companies) were allowed to import and

market LPG in the country to packed and bulk consumers in both domestic and

non-domestic (commercial and industrial) sectors. Since then, parallel marketers

have been importing and marketing LPG under PMS.


Following are the details of LPG Sales by OMCs and parallel marketers till 2003- Formatted: Font: 14 pt, Font color: Text 1
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04:-

OMC's sales

(Fig. in TMT)

Year Domestic Non-Domestic Total Formatted: Font: (Default) Times New Roman, 14 pt, Font
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Packed Bulk

2001-02 7,040 171 99 7,310 Formatted: Font: (Default) Times New Roman, 14 pt, Font
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2002-03 7,737 208 198 8,143 Formatted: Font: (Default) Times New Roman, 14 pt, Font
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2003-04 8,789 105 181 9,075
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PMS Sales

Year TMT

2001-02 178 Formatted: Font: (Default) Times New Roman, 14 pt, Font
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2002-03 208 Formatted: Font: (Default) Times New Roman, 14 pt, Font
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2003-04 216
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Since domestic LPG marketed by OMCs is subsidized, parallel marketers could Formatted: Font: 14 pt, Font color: Text 1
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not make significant impact in this sector, however, they are able to compete with

OMCs in non- domestic commercial/industrial sectors (about 85-90% of the sales


of parallel marketers are in these sectors). Exhibit 01 shows the number of

consumers of LPG till April, 2008 state-wise and Exhibit 02 shows the growth in

LPG marketing in India.

Market Segments Formatted: Font color: Text 1

The LPG market is segmented according to the purpose of the use of LPG as a Formatted: Font: 14 pt, Font color: Text 1

fuel, i.e. for domestic (90% of business), commercial and industrial use (rest 10%).

Accordingly the weight of the cylinder varies (standard weights), as the usage

depends on the type of consumer and to lessen the transportation cost. In the

industrial category, there are bulk users too, who are served in bullets (huge tanks).

The subsidized price of LPG is provided only for the domestic segment, and the

commercial and industrial rates are as per the market decided prices.

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BRAND POSITIONING caps
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One of the important features is that neither the business persons nor the Formatted: Font: 14 pt, Font color: Text 1
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consumers are able to see the product, therefore building the perception of trust

and importance in the minds of the consumers makes a difference. Deliverability

assurance and Safety measures is one of the key features of the company providing

the service. Formatted: Font color: Text 1

As mentioned before that LPG business is mostly self-propelled. Demand, in Formatted: Font: 14 pt, Font color: Text 1

absence of any other substitute fuel as of now, implies that it overshoots the

Supply. Thus some direct marketing measures are implemented in the form of

pamphlets and stuff and some customer awareness programmes in mass media.

Internal Marketing Formatted: Font color: Text 1

Though the LPG business is ruled by the domestic clients, the subsidy regime Formatted: Font: 14 pt, Font color: Text 1

doesnt allow the companies to eke out profit from this division. Industry and

commercial segment provides the revenues but not enough to compensate for the

losses made in the domestic segment. Thus, the LPG SBU is a loss making unit.

Internal marketing is important to orient the distributors, who are the interface

between the consumers and the company, to act in accordance with ethics and see

that there is no diversion of cylinders. This arbitrage incentive is due to the fact,

that domestic cylinders are priced low and hence commercial enterprises have a
tendency to acquire those at a premium, though lesser than the designated

commercial LPG product.

The steps taken by the Government of India/OMCs (oil marketing companies) to

prevent diversion of domestic cylinders are as under. Exhibit 03 depicts the

penalties that have been imposed in case of any breach of law.

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Text 1

The supplies made are adequate to meet the genuine domestic needs Formatted: Font: Times New Roman, 14 pt, Font color:
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of domestic customers. Necessary steps are taken to augment the
supplies to the distributors arising out of unusual circumstances or
development of events.
Customer contacts are done for customers with high consumption
levels to confirm genuineness of refill supplies made.

Refill audits are being conducted at distributorship of oil companies to


find out possible diversion of domestic cylinders for non-domestic use.

Press releases are issued periodically against misuse of domestic


cylinders for commercial purposes. Customer awareness campaigns
are conducted periodically. Banners are displayed and also
pamphlets are distributed periodically to bring awareness in public.

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Customer Retention Techniques Formatted: Font color: Text 1
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The LPG business is mostly self propelled and doesnt need much marketing

measures. In the domestic category, the distributor represents the company and

mostly the consumer chooses that distributor which is closest to his/her locality.

Though there are a few factors which improve the service level of the business: Formatted: Font: (Default) Times New Roman, 14 pt, Font
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Booking through telephone or net color: Text 1
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Prompt and assured delivery

Behavioural patterns shown by the delivery people

Safety and Authenticity (seal) of LPG cylinders

Again, few OMCs started taking measures to improve consumer satisfaction by Formatted: Font: 14 pt, Font color: Text 1

providing home delivery service of household goods by collaborating with

Haldirams and other retail goods providers. The commission is shared amongst

the distributor and the company in the ratio of 70:30.

For the industrial and consumers the reliability of providing the LPG cylinders in

normal as well as emergency times is of utmost priority, as the opportunity cost is

huge in industry. Another important aspect is the price of LPG, as the prices

charged by the company is not regulated and hence can be tinkered with.

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Challenges to Extending LPG for Domestic Use

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In order to meet the increasing demand of LPG by domestic as well as auto fueling

sectors the country needs additional L PG production capacity, adequate

transportation (pipelines & rail tank wagons), and distribution network.

During the calendar year 2008, the actual sale of LPG was 11820 TMT against the

total indigenous LPG availability of 9228 TMT. The shortfall was made up by

importing LPG to the tune of 2759 TMT.For the year 2009, Total LPG imports of

3112 TMT have been planned against the projected demand of 12570 TMT at a

growth of 6%.

Supply of reliable cylinders

Another challenge pertaining to LPG distribution is assuring the reliable supply of

refill cylinders. For small and remote markets, refills may be delivered once a

week or once every other week. For those users that do not keep a second cylinder,

this could mean going without fuel for as long as two weeks. Signing up for two

cylinders to avoid running out of cooking fuel would further increase the start-up

cost of LPG service. Again, this infrequent delivery of refill cylinders serves as a

disincentive against switching entirely to LPG.


Cylinder management

As we know that LPG has to be stored under pressure, metal cylinders are

required. To cover the cost of cylinder manufacture, an initial deposit fee is

required. The combination of the start-up cost and the cash outlay at each refill

(which typically cannot be broken up into smaller installments) presents a serious

barrier to the uptake and regular use of LPG by low-income households.

Import challenges

The LPG import requirement during the year 2009 is estimated to be about 4.7

MMT. The stretched import capacity of the industry at present is about 414

TMT/month which equals to approximately 5.0 MMTpa. International factors such

as seasonal variations, changes in international politics cause the problems.

Diversion of LPG cylinders

The reason for diversion of domestic cylinders by distributors is because the

domestic LPG is subsidized. The selling price of domestic cylinders is less as

compared to the commercial cylinder selling price which is fixed on the actual

Import parity price. There is a wide difference between the domestic and

commercial rates. Due to this most of the supply intended to go to domestic

consumers are transferred to commercial consumers which results in shortage for

above said consumer base.


Affordability

The economically disadvantaged face the problems of high first costs of LPG

(connection and equipment), and the lumpiness of relatively high refilling bills,

and loans are difficult to service without financial returns from the investment.

On comparing the fuel rates for different fuels, we see that the expenditure

occurred for using LPG is much more costly as compare to others. For example

LPG stoves are required to be designed to operate at 60 percent efficiency or

higher, field measurements show efficiencies considerably lower than the design

specifications. If we assume 50 percent stove efficiency for LPG, 35 percent for

kerosene in wick stoves, and 40 percent for kerosene in high-pressure stoves

(where kerosene is gasified before combustion).a 14.2 kg cylinder of LPG is

equivalent to 21 liters of kerosene as a liquid and 19 liters gasified kerosene.

Expressed in rupees per mega-joule (MJ) of energy delivered, LPG is more

expensive than kerosene for low income group population.

Pricing policies

These are a challenge, particularly because of the subsidies already offered. The

subsidies do not reach most of the poor as they are not yet users of LPG, there is

diversion of subsidized LPG from domestic to other uses, and there is also a heavy

burden on the central exchequer.


As per the Subsidy Scheme notified by the Government, OMCs are only allowed

to market subsidized domestic LPG. The present total subsidy on domestic LPG

marketed by OMCs is Rs.7.94 per Kg (Rs.112.77 per 14.2 Kg cylinder). Of this,

Government is paying Rs.2.86 per Kg (Rs. 40.65 per 14.2Kg cylinder) and Oil

Companies are incurring loss of the balance Rs.5.08 per Kg (Rs.72.12 per 14.2Kg

cylinder). Out of the loss incurred on domestic LPG sales, as per the subsidy

sharing mechanism, ONGC, GAIL and OIL are sharing 1/3rd and the rest is borne

by OMCs. If producers like RIL, ONGC, GAIL and OIL are to be allowed to

market subsidized domestic LPG. They would have to follow price regulation and

bear loss, LPG producers, especially private producers, may not be interested in

selling subsidized domestic LPG under the subsidy Scheme. It will also posses

challenge for the government to ensure the supply of subsidized product to

domestic consumers & prevent its diversion to non domestic purposes.

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LPG Programs in India

Deepam LPG scheme Formatted: Font color: Text 1


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An important scheme implemented for the expansion of domestic LPG use has

been the Deepam LPG scheme in the state of Andhra Pradesh. This project was

launched on the 9th July 1999 for the distribution of domestic connections to

women of below the poverty line (BPL) 41 families in the rural areas of the state.

Each connection was accompanied by a one-off subsidy to the extent of the initial

cost, to overcome the barrier to fuel switching. It was meant to reduce dependence

on firewood, reduce the drudgery of collection of/cooking on firewood, reduce

pollution and improve the health of women. Salient features of this scheme are: Formatted: Font color: Text 1

The scheme was administered by the State government Departments of Formatted: Font: 14 pt, Font color: Text 1

Rural Development and Civil Supplies and distributed through OMCs.

The High Court directed that the scheme be confined only to white

cardholders (i.e. those below Rs 11,000/year/family).

The Department of Rural Development identified the beneficiaries; a target

of 1.154 million spread over 22 districts was indicated. Later, the numbers

were increased so that by 2002 about 1.724 beneficiaries (including some of

the urban poor) were listed.

The lists were given to the LPG dealers of the oil companies, who were also

expected to ensure training of the allotted in the use of LPG stoves.


The Department of Civil Supplies provided a one-time deposit of Rs

1,000/connection towards the cylinder and regulator.

Results in terms of the number of connections allotted: till March 2002, 88%

of the urban target and 91% of the rural target had been met (NIRD, 2002).

Learnings from Deepam Scheme

The scheme was not very efficacious, because although all white-card

holders participated, over 80% of non-white card-holders in the region also

did.

The retention rate was down to 85% in less than three years because of

cylinders having been given away to relatives and being lent to civil servants

in local areas (NIRD, 2002).

Factors affecting the refill rate were: distance from distribution points, and

the season i.e., there is higher demand during the monsoons.

Participants perceived advantages of LPG were: timesaving, social status,

cleaner environment, and help during the monsoons. LPG was found useful

chiefly during the rainy season because of more employment (implying

more cash available for refueling), more labor demand and moisture making

collection and preservation of biomass difficult. The scheme itself was

considered attractive because of the initial fee waiver.


However, the perceived disadvantages were: implementation bottlenecks,

reduction in kerosene quota (in municipal areas), high refill costs of refills,

and unwanted envy of non-beneficiaries.

Implementation bottlenecks within the scheme that contributed to

dissatisfaction included: limited choice, inability of suppliers to supply

stoves and accessories on time, co-ordination problems at the local level for

the supply arrangements, and irregularities with beneficiaries also having to

incur Rs 5 30 extra, per cylinder, for collection/delivery.

Suggestions from local self help groups (SHGs) for improvement include:

credit for refills and reduction in cylinder size.

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Rajiv Gandhi Gramin LPG Vitrak Formatted: Font color: Text 1
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Ministry of Petroleum & Natural Gas has formulated a scheme, namely, Rajiv Formatted: Font: 14 pt, Font color: Text 1

Gandhi Gramin LPG Vitrak Yojna, which is going to be launched very soon. This

envisages the increase in LPG population coverage from 50% to almost 75% by

2015. The scheme is primarily to reach LPG in villages, so that dependence on

conventional fuels like wood, coal etc. is reduced. This will not only help in

conservation of forests but will also have positive impact on environment as well

as on the health of our rural womenfolk.

This Scheme would be implemented by the Oil Marketing Companies (OMCs)

namely Indian Oil Corporation Limited (IOC), Bharat Petroleum Corporation

Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) in

addition to their Marketing Plan for setting up regular LPG distributorships.

Identification of locations would be finalized by the OMCs based on the present

penetration/coverage, minimum refill/sale potential for sustaining the RGGLV.

According to the program, the program will be sustainable for cluster of villages

having about 4000 families and consumption of 7 kg per month, out of which half

may go for LPG. Contrary to 2500 cylinders, GLV will be set up with the potential

of 1000 cylinders. The net income for the proprietor expected is Rs 7664/- per

month. The selection of the candidate will be done by draw system. RGGLV will
be setup by OMC who have its bottling plant nearest to the identified cluster of

villages.

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color: Text 1
Competition Scenario

Competition Scenario: Formatted: Font: 14 pt, Font color: Text 1

There are mainly two categories of competitions existing in Indian LPG industry.

They are as follows:

1. Inter OMC competition

2. Inter OMC-PMC competition

Inter OMC competition:

OMCs is India is seen as the facilitator to the nations development. Hence, apart

from churning profit for sustainable existence and growth, it has to operate in

accordance with the nations interest. Thats why OMCs are regulated such that to

avoid unwanted friction among themselves and concentrate their whole energy to

nations cause. So, there exists a special type of competition among the OMCs of

India.

In domestic segment, OMC has to sell its product at a price decided by the

government. So, there exists no scope of price war, which leaves the OMCs to

compete on market share. But, to avoid unwanted friction and hence deadweight

loss to the society, the regulatory body, MOPMG tries to maintain the optimum

number of dealers in an area. In order to that the number of dealerships of a

company is decided by the committee in accordance to their market share and


presence in the region. Hence, chances of competition for market share in domestic

segment are also very limited.

Though, in industrial segment, with lack of price regulation and hence better scope

for margin there is an intense competition in the form of:

1. Price

2. Service

3. Promptness in delivery

4. Hours of catering or working hours

OMC-PMC competition:

PMC, due to subsidised price prevailing in the domestic segment has not shown

any interest to compete with the OMCs. But, in industrial segment it is giving

OMCs run for their money.

Threat from substitutes:

Today, PNG is considered to be most eligible fuel to replace LPG. Few, properties

of PNG which are regarded as giving it an edge over LPG are follows: Formatted: Font: Times New Roman, 14 pt, Font color:
Text 1

PNG is Convenient Formatted: Font: 14 pt, Font color: Text 1

24 hours uninterrupted gas supply,

No changing or handling of gas cylinders,

No more last minute emergency,


Simply, do away with cylinders and its associated problems,

Make payments after you consume, through banks, drop boxes, ECS, Net,

etc.,

PNG is Economical,

PNG works out to be up to 10% cheaper than LPG,

14.2 kg. LPG is equivalent to 18 units of Natural Gas shown in your meter.

At present, price of LPG is Rs. 255/- you consume Gas costing Rs. 205/-

only, saving Rs. 50/- (approx.) every time.

PNG is Safe:

Natural Gas catches fire only when it forms a 5-15% mixture with air whereas

LPG catches fire when it forms 2% or above mixture with air.

Our supply designs, executions and operations are being done as Per

International best Practices.

PNG is Clean:

Being a gaseous fuel, very clean compared to any other fuel with more than

94%.

Combustible particles.

Burns with a flame always hence, no blackening of vessels.

Sulphur content less than 10 PPM.

Most preferred fuel in vehicles in Mumbai today.


Contribution for a cleaner society.

PNG is versatile

Apart from cooking, other appliances like geyser, air conditioner, vehicles

etc. can be used on Natural Gas. However, please do not attempt to

alter/modify the existing installation yourself or through any unauthorized

person.

Conclusion Formatted: Font: Times New Roman, 14 pt, Font color:


Text 1

We have seen the contrast between the different market segments prevailing in Formatted: Font: 14 pt, Font color: Text 1

Indian LPG industry. To be more precise, we saw how the domestic segment is

quite different from its counterpart industrial and bulk segment, be it the

implications of subsidy, demands of users or the interference from the government.

Further, we studied the supply and logistic involved in LPG distribution and how

the number of agency in a region is optimised to reduce the dead weight loss to the

society. We had also focused on the marketing party which we found to be difficult

or at least peculiar, due to the fact that customer couldnt see the product which

makes it by large homogenous.

Lastly, we dealt with the scope of growth for LPG in Indian market and threat from

its close and worthy substitute PNG.


Exhibits Formatted: Font: Times New Roman, 14 pt, Font color:
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Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
State-wise and Company-wise LPG Domestic Consumers (As on 1.4.2016) Formatted: Font: 14 pt, Font color: Text 1
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color: Text 1
Formatted: Font: 14 pt, Font color: Text 1
('000 Number)
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color: Text 1

State / UT As on 1.4.2016 Total as on Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Font: (Default) Times New Roman, 14 pt, Font
IOCL/AOD HPCL BPCL Total 1.4.2007 color: Text 1
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(Col.2-5) Formatted: Font: 14 pt, Font color: Text 1


Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
1 2 4 5 6 7 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
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States
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color: Text 1
Andhra Pradesh 4090 4427 2290 10806 10342 Formatted: Line spacing: Double
Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Arunachal Pradesh 123 0 0 123 116
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Formatted: Font: (Default) Times New Roman, 14 pt, Font
Assam 1834 24 61 1919 1813 color: Text 1
Formatted: Line spacing: Double

Bihar 1688 315 370 2373 2254 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Chhattisgarh 558 327 169 1054 987 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Delhi 2656 551 908 4115 4011
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color: Text 1
Goa 9 244 146 399 391 Formatted: Line spacing: Double
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color: Text 1
Gujarat 2980 1073 1217 5270 5067
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Haryana 1621 583 1053 3257 3088 color: Text 1
Formatted: Line spacing: Double

Himachal Pradesh 1039 141 71 1252 1179 Formatted ...


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Formatted ...
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Jammu & Kashmir 390 824 143 1358 1327 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Jharkhand 812 162 129 1103 1026 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Karnataka 2375 1835 1361 5571 5225
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color: Text 1
Kerala 3021 751 1584 5357 5046 Formatted: Line spacing: Double
Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Madhya Pradesh 2194 1078 840 4112 3875
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Formatted: Font: (Default) Times New Roman, 14 pt, Font
Maharashtra 1519 5346 6008 12873 12415 color: Text 1
Formatted: Line spacing: Double

Manipur 218 0 0 218 206 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Meghalaya 109 0 0 109 101 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Mizoram 188 0 0 188 181
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color: Text 1
Nagaland 140 0 0 140 129 Formatted: Line spacing: Double
Formatted ...
Orissa 558 624 276 1458 1395 Formatted: Line spacing: Double
Formatted ...
Formatted: Line spacing: Double
Punjab 2663 882 1097 4642 4406
Formatted ...
Formatted: Line spacing: Double
Rajasthan 1791 1032 1250 4073 3861
Formatted ...
Formatted: Line spacing: Double
Sikkim 114 0 0 114 109 Formatted ...
Formatted: Line spacing: Double
Tamil Nadu 6183 1079 2595 9856 8798 Formatted ...
Formatted: Line spacing: Double

Tripura 256 0 0 256 238 Formatted ...


Formatted: Line spacing: Double
Formatted ...
Uttar Pradesh 6202 1361 2687 10250 9688
Formatted: Line spacing: Double
Formatted ...
Uttaranchal 1247 71 183 1501 1428
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Formatted ...
West Bengal 3447 969 704 5120 4807 Formatted: Line spacing: Double
Formatted ...
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Union Territories Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Andaman & 53 0 0 53 51 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1

Nicobar Formatted: Line spacing: Double

Chandigarh 206 66 46 318 313 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Dadra & Nagar 0 30 0 30 30 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1

Haveli Formatted: Line spacing: Double

Daman & Diu 0 26 16 42 40 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Lakshadweep 3 0 0 3 2.6 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Puducherry 115 91 47 253 230
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color: Text 1
Grand Total 50397 23912 25252 99562 94180 Formatted: Line spacing: Double
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color: Text 1
Source. Public Sector Undertakings. Formatted: Line spacing: Double
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color: Text 1
Formatted: Line spacing: Double
Growth in LPG Marketing in India

Item Unit Growth in LPG Marketing Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1

2005-06 2006-07 2007-08 2008-09 (P)

Indigenous Production TMT 7717 8454 6743 7008 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Imports - PSUs TMT 2450 1968 2156 1937 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1

Imports - Pvt. TMT 433 321 676 409 Formatted: Line spacing: Double
Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Consumption - PSUs TMT 9976 10530 11482 11775 Formatted: Line spacing: Double
Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Customer Enrolment Lakhs 44.9 53.9 64.9 53.2
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Year-End Position color: Text 1
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LPG Customers - PSUs* Lakhs 886 949 1018 1068 Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
LPG Distributors - PSUs Nos. 9270 9363 9365 9366
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color: Text 1
LPG Markets Nos. 4288 4359 4393 4420 Formatted: Line spacing: Double
Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Bottling Capacity TMTPA 8122 8448 8697 8967 Formatted: Line spacing: Double
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(P) Provisional color: Text 1
Formatted: Line spacing: Double

* Domestic And Non-Domestic Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
Formatted: Line spacing: Double
Source: Oil Companies Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1
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color: Text 1
Formatted: Line spacing: Double
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Details of Provisions of Control Order/MDG/DA to Contain Diversion of Formatted: Font: (Default) Times New Roman, 14 pt, Font
color: Text 1

Domestic LPG for Unintended Purposes

Marketing Discipline Guidelines (MDG) 2001 has been implemented which Formatted: Font: 14 pt, Font color: Text 1

imposes heavy penalty including termination of distributors found indulging in

diversion. Specific provision for this under MDG is mentioned below:

Irregularity Penal Action

1st instance 2nd instance 3rd instance

Diversion of Fine of Rs 20,000 and Fine of Rs 50,000 and Termination Formatted: Font: 14 pt, Font color: Text 1
Formatted: Line spacing: Double

domestic recovery of differential recovery of differential

cylinder to in retail selling price in retail selling price of

non-domestic of 14.2 kg cylinder and 14.2 kg cylinder and 19

use 19 kg cylinder on per kg cylinder on per

cylinder basis. cylinder basis.


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BIBLIOGRAPHY color: Text 1, All caps
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www.bhiwalicylinder.com Field Code Changed

www.google.com

www.scribd com

www.wikipedia.com

www.projject.com

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