Source: Business Standard, Sept 01, 2016
Mumbai: With the central government restricting liquefied petroleum gas (LPG) subsidy to consumers earning less than Rs 10 lakh per annum, a ready-made market is now available for private oil companies. This, coupled with the lure of higher margins, is pushing them to aim for a larger pie of the cooking gas market in India.
India’s total LPG consumption rose from 18 million tonnes (mt) in 2014-2015 to 19.6 mt in 2015-2016, according to Petroleum Planning and Analysis Cell (PPAC) data. The three state-run oil marketing companies (OMCs) have 274,000 connections in the waiting list across the country, PPAC data show.
This shows that there is a huge market to tap.
Essar Oil and Reliance Industries are two private refiners vying for the LPG market in India. Mahesh Advani, head of direct sales at Essar Oil, says they have a potential market in the non-subsidised LPG customers and commercial users.The company is open to both subsidised and non-subsidised LPG distribution business in the country. Advani says a higher margin is the rationale for the company’s planned entry to this segment.
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