Suyash Gupta, Director General of Indian Auto LPG Coalition (IAC), believes that the CNG industry will be impacted as the electric vehicles (EVs) narrative builds up. IAC, which is the nodal body for the promotion of auto LPG in India, have members from oil sector PSUs, private auto LPG marketers, kit suppliers and equipment manufacturers.
Gupta, who is also the Managing Director of CleanFUEL India, has been at the forefront of promoting clean auto fuel in India for the past 14 years. A former consultant to National Energy Technology Laboratory, US Department of Energy, he is also a member of apex committees of Union Ministry of Road Transport and Highways, Government of India, being a member of Standing Committee on Emission Legislation (SCoE) and Central Motor Vehicle Rules- Technical Standing Committee (CMVR-TSC).
In his interaction with APF, Suyash Gupta elaborates on the current status of auto LPG vehicles in India and their growth prospects as demand for clean fuel technology grows in the automotive industry.
Kindly highlight some of the recent developments in the Indian auto LPG market
Although the sale of auto LPG has been rising in the country, a very disappointing development has been the reduction of authorised LPG/CNG kit converters. The after-market for conversion has almost come to a naught because of the cumbersome regulatory environment.
From about 40 authorised type approval holders, about five to seven years ago, there are only five to six left now. It takes almost Rs 4 crore for a player to get his range of LPG and CNG vehicles, with variants approved. An approval is currently valid only for three years. Even if there is no change in any component of the kit, the company has to spend the same amount to get certified again. This has led to mushrooming of those players who do not have authorisation and often indulge in spurious and unsafe kit business.
The government needs to provide a level playing field to the authorised vendors by way of aligning this with global practices. For example, in Europe, all such types of approvals are valid for perpetuity.
How is the current demand-supply scenario for auto LPG in India?
The demand-supply scenario is very well poised and has been tremendously encouraging, particularly in the past year. The demand has been going up in double digits since October 2016 when the prices of auto LPG were reduced by oil marketing companies, bringing them to the half-way mark of petrol prices.
How easy or difficult is it for auto OEMs to transit from internal combustion engines (ICE) to auto LPG (in terms of required technology upgradation)?
State-of-the-art conversion kits, with fuel injection technology, have been available globally. OEMs offering LPG variants globally, have used conversion kits from several top global kit brands to meet the latest emission norms in vogue. In fact, adoption of gaseous fuels will make it easier for almost all OEMs to meet emission norms, including BS VI. Almost all OEMs are well aware of available technologies and their benefits.
Compared to CNG, what are the advantages of using LPG as fuel in automotives?
One big advantage for an auto LPG customer is that it takes only as much time to tank up as it takes in case of a petrol or diesel car where as the time taken to tank up in case of a CNG car is usually longer. Another advantage is that the auto LPG kits are smaller and compact and can be placed in the well of the boot easily and, hence, there is a lot of space available for other things to be kept in the boot. The tank is also lighter than the CNG tank. Also, CNG operates at pressures of almost 250 kg/cm2 or more, whereas auto LPG at pressures of only around 15 kg/cm2. Even in terms of engine performance, CNG vehicles have a significant performance loss, whereas for an LPG vehicle the performance loss is minimal.
In spite of various benefits offered by LPG, why has the demand for auto LPG vehicles not picked up?
It will not be entirely correct to say that the demand for auto LPG has not picked up. Today, after auto LPG is priced at around 50 per cent of the price of petrol, an estimated 10,000-12,000 conversions into auto LPG happen every month. And with that, the total number of vehicles running on auto LPG could touch 30 lakhs in the next five years.
Also, the sale of auto LPG has been rising continuously. Total auto LPG sales in the country stood at 97 TMT in the April-June quarter of FY18, rising 19 per cent from the corresponding quarter of the previous fiscal. In the Jan-March period of the current calendar year, the sales went up by 7.3 per cent at 90.4 TMT.
Will the trend towards non-polluting fuel technology to run vehicles lead to increase in demand for auto LPG?
People are getting more and more environment conscious and they are also looking at cheaper automotive fuel. Auto LPG offers both environment protection as well as a cheaper means of running vehicles. We are anticipating there will be a quantum jump in auto LPG sales. However, the government needs to firmly back the adoption of all cleaner fuels. One size will not fit all.
The government wants to see only EVs to be sold by 2030. Will this affect the market of auto LPG vehicles in India? Can auto LPG act as bridge in transition from internal combustion engines (ICE) to EVs?
While the EV narrative building up has created a significant opportunity for auto LPG, it certainly will impact the CNG industry. It takes almost Rs 200 to 400 crore for a city to convert to CGD (city gas distribution) with payback periods being very high.
With EV narrative building up so rapidly, CGD players are becoming increasingly skeptical to invest. This is going to effect CNG rollout, thus providing even more opportunities for auto LPG particularly as a key bridging fuel for the next 15 years or more. Even after 2030, auto LPG may be looked at positively by the government and all stakeholders by virtue of the demonstration in the next 12 to 13 years.
Do you think the government (in addition to EVs) should also look at other non-polluting technologies before it finalises the decision?
We are hopeful the government will look at auto LPG favourably as India may actually be emitting more CO2 eventually if all vehicles in the country will be electric vehicles, since about 68 per cent of all power produced in India is obtained by burning fossil fuel. One size does not fit all. The government needs to adopt a viable alternate fuel mix wherein auto LPG can make tangible impact.
What is your outlook for auto LPG vehicles in India?
The outlook is very positive with opportunities for every stakeholder. Distribution companies have a lot to gain, the OEMs can launch auto LPG variants and stand to benefit immensely. Two-wheeler makers have a great opportunity as auto LPG is the only alternative fuel suitable to two-wheelers and at a time when pollution mitigation is on everyone’s mind, auto LPG remains as a low hanging fruit.
India may actually be emitting more CO2 eventually if all vehicles in the country will be electric vehicles, since about 68 per cent of all power produced in India is obtained by burning fossil fuel. One size does not fit all.
IAC’s role in auto industry
Indian Auto LPG Coalition is the nodal body for the auto LPG industry in India, with close working associations such as World LPG Association, SIAM, and ARAI. The coalition is rapidly expanding to include key players in the automotive industry to address growing concerns in the alternative fuel segment such as stringent government policies and unsafe consumer practices. The Coalition also aims to raise the interest of stake holders by promoting the use of auto LPG, which will attempt to remove unnecessary hindrances for the development of the fuel, as well.