Auto LPG registers about 5% growth in sales

The auto LPG sector in India closed the fiscal year 2016-17 with an encouraging sales growth of 4.9 per cent over the last fiscal, owing to a drop in prices.

Meanwhile, the sales volume growth was about 8.18 per cent in March 2017 as against March 2016. The auto LPG sales in India grew to 346 TMT in 2016-17 as against 330 TMT in 2015-16. The factors that helped the industry to achieve this growth are the reduction in auto LPG price by leading oil companies such as Indian Oil, HPCL, and BPCL since October 2016 making the fuel about 50 per cent cheaper than petrol. Following this, the sales jumped by 16 per cent in the period between October 1, 2016 and December 31, 2016.

"There is no doubt that auto LPG is the fuel for the future, and that it is the solution to check the growing pollution levels in Indian cities. We are positive about the growth in sales volume achieved this fiscal as it reflects the growing penetration of the fuel across the country. However, we are hopeful of much more positive growth figure in the coming year as the GST regime rolls out, bringing the commercial and domestic LPG prices at par with each other," said Suyash Gupta, Director General of the Indian Auto LPG Coalition (IAC).

Auto LPG is a clean automotive fuel, which is much cheaper than petrol, diesel and comparable to CNG. The current indirect taxation regime makes auto LPG a less attractive option. While there is zero custom and excise duty on domestic LPG and minimal VAT, the same are cumulatively as high as 15-20 per cent on commercial LPG. All this is set to change with the GST regime.

"With the GST regime, the government has promised to bring both the commercial LPG and domestic LPG under a singular tax rate. This will encourage users to turn to auto LPG. At the same time, both public and private sectors shall feel encouraged to invest more in the sector. We are sure we will be looking at significantly impressive growth rates next year," Gupta added. Globally, Auto LPG is the third most commonly used automotive fuel after Petrol and Diesel. Over 26 million vehicles across 70 countries use Auto LPG to help clean their urban environment.