lpg marketing domestic & non-domestic

8/3/2019 LPG Marketing DOMESTIC & Non-Domestic

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LPG MARKETING

Domestic & NonDomestic


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The Scenario

Stringent environmental norms would drive industries toswitch to gaseous fuels

In India, LPG is fast growing into a multi utility

environment friendly fuel

Delivering on customer needs and expectations will bekey to customer acquisition & retention

Value added services along with competitive pricingwould be the key to success


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HPCL: Dom. LPG Sales over the Years

19402184

2372 2359 23922515

2631

0

500

1000

1500

2000

2500

3000

'02-03 '03-04 '04-05 '05-06 '06-07 `07-08 '08-09

Year

Sales(TM

T)


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HPCL: ND LPG Sales over the Years

86 98

353447

653

832

964

0

200

400

600

800

1000

1200

'02-03 '03-04 '04-05 '05-06 '06-07 `07-08 '08-09

Year

Sales(TM

T)


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Market Share

HPC37%

BPC

31%

IOC

32%

Commercial Segment

HPC BPC IOC

HPC

26%

BPC

26%

IOC

48%

Total Sales

HPC BPC IOC

HPGASMarket Leader in Commercial Segment


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DomesticLPG Mktg.

Proposal for Location for New Dship Feasibility Selection Process LOI Appointment

Dship Agreement Enrolment of Customers

Domestic Non Domestic Packed (Commercial)

Non Domestic Exempted Making Supplies Monitoring Activities Provisions of MDG & Dship Agreement EC Act & LPG Control Order


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Current Status 2050 benefiting 26,000 families Rasoi Ghar Models:

In villages in association with Nehru Yuva KendraSangathan (NYKS)

In Forest Villages in association with ForestDepartment

At Hospitals such as AIIMS, Bombay Hospital etc.

At Pilgrim Centers such as Nasik Kumbh,

Maruthamalai Temple etc. At construction sites such as Natya Gruh, Yavatmal

HPCL has been awarded the National Excellence forInnovative technologies and GoldenPeacock for its

RasoiGhar concept.

HP Gas InitiativesRasoi Ghar


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Traditionally LPG marketed as Domestic Fuel bottled inCylinders.

Need For Change :

Large number of Housing complexes to smalltownships. Multi storied Buildings. Change in life style of people in Metropolitan Towns. Co-operative Societies not allowing Delivery boys to

take cylinders through lifts. Space/time availability. Hence need for an innovative alternate option.

LPG Reticulated System

Background :


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Reticulated System is supply of

domestic LPG through pipeline

network from a centralised cylinder

bank or bulk installation.

What Is Reticulated System :

LPG Reticulated System


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Handling of cylinders outside the house. Storage system fitted with safety

fittings i.e. Pressure Relief Valve, ExcessFlow Check Valve.

Auto changeover with OPSO & UPSO. First & second stage isolating valve. Three stage Pressure Regulation Quick shut off valve in the kitchen Interactive safety training to operators. Availability of Fire Extinguishers

Reticulated System

Safety Features


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Reticulated System

HPC Projects

Commissioned 35 projects in Mumbai, Pune,Jaipur, Hyderabad, Visakh, Delhi, Kolkatta &

Cochin comprising of 3900 flats covering major

Builders like Heera Constructions, RNA and

Lokhandwala. 15 projects are under implementation for 2400 flats

MOU signed with Jallandhar improvement trust for

developing modern housing scheme spread over 250 acreswith state-of-the-art facilities including piped LPG supply

to over 3000 flats.

Basic Infrastructure consisting of bulk LPG storage uptothe battery limits will be provided by HPC.


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LPG Marketing Non-Domestic

a) Parallel Marketing Scheme introducedin 1993

b) Non-Domestic LPG - outside APM in1998

c) Dismantling of APM - 1.4.2002

Non domestic share is 13%


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LPG Marketing

Non-Domestic

Non-domestic segment - potential area for

profitability .

ND Market Size 964TMT , HPCL -353TMT

Parallel Marketers share gone up from 47%

to 54% at the cost of Industry.

Our market share is 37%


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LPG Marketing

Non-Domestic

Categories

Non-domestic -Essential

(at domestic rate)

Non-domestic non-Essential

category.


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Why HP Gas .

Assistance in assessment of Fuel Requirement. Planning & Design of Installation.

Selection of Equipments, appliances and Accessories.

All statutory approvals

Facilitating in setting up LPG Installation

Training to concerned personnel

Regular maintenance and periodic inspection of

Installation

Technical assistance for any related issues

Single point contact to address all your queries.


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LPG Applications By Industry

1. GLASS 11. PHARMACEUTICAL2. CERAMICS 12. FOOD PROCESSING

3. REFRACTORIES 13. CATTLEFEED

4. PRINTING & FORGING 14. CHICK BRODING

5. STEEL INDUSTRY 15. TEXTILE SINGEING

6. THREAD MANUFACTURING UNIT 16. POWDER COATING

7. PAINTING INDUSTRY 17. BRICK MAKING

8. FOUNDRIES 18. RUBBER PROCESSING

9. MOULD AND CAST 19. BITUMEN

10. AUTOMOBILE 20. DAIRY


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Fuel Cal Value inK Cal/Kg. Efficiency Equivalent LPG requirement inKgs.

FO 10200 60 550 Kgs. 1000 Ltrs. FOLSHS 10300 55 500 Kgs. 1000 Ltrs. LSHSHSD 10800 69 600 Kgs. 1000 Ltrs. HSDLDO 10500 60 600 Kgs. 1000 Ltrs. LDOWOOD 4400 40 175 Kgs. 1000 Kgs. of WoodCOAL 3800 40 150 Kg. 1000 Kgs. of Coal

CONVERSION FROM VARIOUS FUELS TO LPG:


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PIONEERING EFFORTS BY HP GAS


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Alternate Applications of LPG

Promoted alternate application of LPG inTextile, Bakery, Powder coating, Ceramic andChic Brooding segments

Piloted new industries such as Foundries, PaintManufacturing Units, flame weeding, Steel RollMills etc.

Working in coordination with Major BurnerSuppliers like Riello (Neotech Systems), Kanthal(Sandvik Asia) & Wesman, Eclipse & VinoshaBurners for conversions in various Segments.

V ll Vi F Kh li


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Valley View Farms, Khopoli

Advantages

Clean BurningHumid heat to provide growth

Suitable for open and closed areas

Accurate temperature control

Uninterrupted heat reducing mortality rate

Financial benefit of Rs.9140/- per month.

Per Kg cost of Chic is reduced.

Cost of conversion per chic is

Rs.2/- for a batch of 8000 chics

ealthy Chicken, Higher return

Chi k B di Fl


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Chick Brooding-Flame

Weeding


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Poultry Equipments


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Corrugated Box Industry

Corrugated BoxManufacturing Unitrunning on Electricity

Electricity was beingused for heating 3drums. Heating of rollingdrums is required for

effectively pasting twopaper sheet with glueand maintaining thehardness of the finalpasted sheet.


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Post LPG conversion

Feedback from the customer :

Electrical heating : Start Time required was min. 1hrs to attain temperature

Production Rate has increased as drum rotationspeed can be increased as LPG burner is givenmore heat than that of produced by electricalburner

Quality of finished product has improved, Finishedproduct has become more stiff than the earlierone

Customer has even agreed to convert his secondunit from electricity to LPG


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To Summarize

By converting the unit from electricity to LPG customer has benefited in


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Powder Coating

M/S.M.J.Coaters Pvt Ltd, Navi Mumbai HSD consumption is 16 Ltrs/hour

8 hour Operation per day

Total cost 16x8xRs.40=Rs.5120 LPG consumption 10.8 Kg/hourx8xRs.40

=Rs.3456 I.e. savings of Rs 1664 per day

Rs.1664 per day x 30 days

Saving of Rs.49920/mth 30%


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Pioneering efforts by HP Gasin other Segments


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Glass & Ceramic Making

Stain free finished productEnsures mould surface remain clean at all

times.

Used to heat, purify and condition molten glassCan be used as feeders for glass

Also used in fire polishing, Lehrs

etc.


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Metal Cutting

Gives better shape to metals Cost effective and safer

Catalyses the process making metal cutting

quicker thus saving a lot of time


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Textile Singeing

More Efficient and Economical

Singeing is Uniform

Customized flame control

Safer compared to other fuels


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Bakery Conversion

M/S.Palekar Foods, Satara Prodn is one batch/hourx12 hrs per day

HSD reqd 7Ltrs/batchxRs.40per Ltr

Rs.280/per batch x12 hours = Rs.3360 LPG reqd is 4.5KgxRs.40 per Kg

=Rs.180x12 hours = Rs.2160

Savings per dayRs.1200=35%


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Application-Paint Baking

Application : Paint Baking

Equipment : Paint Baking

Oven

Type : Batch TypeOven

Heat Source : Indirect fired

shell & tube type

Maximum Thermal Load : 78 Kw

Oven Size : 8 x 8 x 8


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Converted more than 200 industries to LPG

Pioneers in Fuel conversions

Industrial segments :

Type of Industry Fuel Savings

Poultry Electricity 62%

Glass Electricity 56%

Bakery HSD 54%

Hotmix Plant HSD / LDO 52%

Corrugated Box HSD 40%

Power Coating HSD / LDO 30%

Ceramic & Tiles HSD 35%

Matsyafed & MOF helping HPCL to bring revolution in

segment of Fishing Boats !!!


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Ceiling limit

For bench mark level of appropriate customer

holding, planning new distributorship & viability

of existing distb.

Towns over 40 L (15 K), up to 21L (12K), up to10 L(10K) & below 10 L(8K).

Exemption for a Coop. Society.


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Marketing/Trading area

Compact, defined & with adequate potential.

Town limit (Urban) or road etc. in a town.

Must be defined in LOI, appointment letter &

distbship agreement . Extension upto 30 kms. unviable & not part of

other distbs. area.


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LPG PRICING- CATAGORIES

LPG Bulk - Non Domestic

LPG Domestic Pkd - 14.2 , 5 , 47.5 LPG ND Pkd 19, 35, 47.5


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LPG PRICING

During APM regime prices of LPG were decidedby Oil Coordination Committee

Non Domestic ( Bulk & Packed ) pricing was

deregulated eff. April 1, 1998. After deregulation

price of non domestic LPG is market driven

Though Govt. deregulated the prices of all

petroleum products, including domestic LPG eff.

April 1, 2002, the prices of domestic LPG wasfrozen at the levels prevailing on 17-3-02. In June

04 and Nov 04 increase of Rs. 20/- each was

approved. Eff 5.7.08, there is further hike of Rs

50/- per cyl.


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ND BULK LPG

Price developed for ten port plus four Inland

refineries

IPP includes Customs duty 5.15%

Marketing margin, cost, import cost,

Terminalling charges ( Rs 5000/MT app) Ex-storage price is advised.

State surcharge of receiving state

Excise Duty 8.24% (AV / TV) Discount if any

Sales Tax as applicable

LPG PRICING FOR NON


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LPG PRICING FOR NON

DOMESTIC

NON DOM. PKD LPGCost price concept

No subsidy for ND PKD

Pricing uniformity with OMCsmaintained

Multiple plants at same location

highest cost price of industry plant isconsidered.

Cost price for each plant is different.

NON-DOMESTIC PKD LPG


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NON-DOMESTIC PKD LPG

Actual PBU Import parity Price (with 5.15% CD,cess)

Marketing margin, CVR , Filling cost, import cost,

Terminalling charges

Freight Actual from port to plant - Rail/ Road/ P/L

State surcharge, Bulk Octroi- if any,

Plant wise cost Price

Excise Duty- 8.24%

Packed Frt ( Rs 13/16/19 per cyl) CBR

Sales Tax , Dealer commission, Vat on DC

RSP

Price build up for Dom and ND


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Price build up for Dom and ND

packed Delhi Market for July 200814.2 kg 19 kg

EX STORAGE POINT PRICE RS/MT 19689.50 46492.62

BULK NRF FROM SOURCE TO PLANT(DOM NRFSAME AS UNDER APM) RS/MT 99.70 1909.45

STATE SPECIFIC COST RS/MT 2.00 2.00

PRICE ADJUSTMENT FACTOR (PAF) RS/MT 1509.00 0.00

ISSUE / COST PRICE AT PLANT RS/MT 21300.20 48404.07

EXCISE DUTY ON ABOVE @ 8.24% RS/MT 0.00 3988.50

TOTAL RS/MT 21300.20 52392.57

ABOVE PRICE PRORATED FOR 14.2/19 KG CYL. RS/CYL. 302.46 995.46

LOCAL DEL CHARGES(PKD FRT) RS/CYL. 10.00 13.00

BILLABLE RATE FOR DEALER RS/CYL. 312.46 1008.46

Delhi Subsidy -40.00

SALES TAX @ 4% DOMESTIC AND 12.5 % NON DOM. RS/CYL. 10.90 40.34

SUB TOTAL - I RS/CYL. 283.36 1048.80

DEALER COMMISSION RS/CYL. 20.54 50.00

VAT ON DEALER COMMISSION RS/CYL. 0.82 2.00

SUB TOTAL - II RS/CYL. 304.72 1100.80

RSP ROUNDED OFF TO NEAREST FIVE PAISA RS/CYL. 304.70 1100.80


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DOMESTIC LPG - Subsidy

Monthly plant wise Cost price issue price =

Gross Loss for claim purpose i.e (IPP +BF +

TC+ Margin+ FC+ Cyl comp) -

(BCSP+NRF+PAF)

Plant wise Gross loss 1/3 of frozen subsidy

rate of April 2002 = Total Loss

1/3 of Total Loss shared by ONGC/GAIL.

Remaining loss is partially compensated by Oil

Bonds.


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THANK YOU

lpg marketing domestic & non-domestic

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