Govt missing easier alternative amid e-mobility push: Auto LPG industry

As electric mobility becomes the new trend in the automobile industry, with the Centre giving it a major policy push, Indian Auto LPG Coalition (IAC) has said that auto LPG should have been given more emphasis as an alternate fuel as that would have been more achievable in the short term than going full-throttle on e-mobility.

IAC Director General Suyash Gupta said that although there has been a major emphasis among original equipment manufacturers (OEM) on e-vehicles, in the last few pre-Covid months "good interest" was seen among OEMs on the LPG front.

IAC is the nodal body for the promotion of auto LPG in the country.

"We think that the policy-makers are missing the low-hanging fruits. E-mobility may or may not turn out to be the panacea that our country has been banking on. Yet, it certainly is not prudent to ignore low-hanging fruits of today for aspirational goals, maybe setting in only a decade later," he said.

"Meanwhile, since e-mobility had been the blue-eyed boy of the policy-makers, OEMs have also been following the government's nudge on this. However, in the past few pre-Covid months, we had seen good interest from the OEMs on the LPG front," the IAC DG said.

He said that the industry wants GST of under-5 per cent, at par with almost 90 per cent of the LPG used across the country, among other policy support.

Secondly, various ministries need to recognise concerns of the sector closely and, as a key step, make the conversion to all gaseous fuels much friendlier fiscally and from the point of view of regulation, Gupta said.

Saying that kits are inexplicably taxed at 28 per cent under the GST system, he noted that there are norms that are "extremely unfriendly" for the conversion-kit industry.

Gupta said that consumers globally have been using auto LPG for several decades and it is the third most-widely-used automotive fuel after petrol and diesel.

In terms of pricing, it has consistently been at least 40 per cent cheaper than petrol and much cheaper than diesel in running costs.

"Even in terms of price movement, LPG prices do not exactly follow crude pricing since more than 60 per cent of global LPG is sourced from gas. And with the amount of LPG which has come onshore after US shale gas came in, the supply scenario has also been very positive," Gupta said.

Gupta said that India lags significantly among other countries in auto LPG consumption. While the world consumption of auto LPG was 26 million tonnes, Indian figures stood at barely 0.43 million tonnes.

"Countries like South Korea, Turkey have consistently touched the 3 million tonne- mark annually — in fact, South Korean numbers may possibly see a big jump, on account of a key policy change this year. Even in terms of the number of stations, India has less than 1,500 auto gas stations, whereas the global number stands at almost 80,000."

On the outlook for the sector, the IAC DG said that although every sector has been hit hard by the pandemic, once the economy picks up post-monsoon, the auto LPG sector could see better month-on-month numbers, indicating a smart recovery..