Abundant supply, lower prices make automotive LPG promising fuel for future

New Delhi: As the government propagates use of cleaner fuels to cut vehicular pollution, powering automobiles on LPG offers a viable solution with abundant supply and lower prices, automotive LPG industry body IAC said.

LPG enjoys tremendous supply security with a favourable existing and future pricing outlook, making it attractive for its increased usage as automotive fuel globally and in India, Indian Auto LPG Coalition Director-General Suyash Gupta said.

He said global consumption of auto LPG has risen by over 40 per cent over the past 10 years but its use in India is limited.

With eight of the 10 largest car manufacturers in the world producing LPG-powered cars already, original equipment manufacturers (OEMs) in India must also increase their offerings of LPG variants as a low-hanging fruit, impacting air quality almost immediately, he said.

Global LPG prices have crashed as the US consolidated its position as the world's biggest producer of LPG, with an output of 76 million tonnes last year and exports of over 34 million tonnes.

"More LPG is available now than it has ever been and at better prices," he said adding that this has ensured that auto LPG emerges as one of the most promising alternative automotive fuels globally.

Not just the glut in supplies but even prices have halved in recent times and the fuel is as attractive as compressed natural gas (CNG), he said.

"Auto LPG -- particularly from an Indian context -- had, in the past, carried a few incorrect and uninformed legacy presumptions. Particularly from the OEM and policymakers' perspectives, these included a sense that LPG is in short supply and that if enough LPG is available for automotive usage. The other was the historical price volatility of LPG until 2014.

"However, because of the huge addition to the global LPG supplies in the last 5 years, led by US Shale, perhaps no other widely used alternative fuel is as abundantly available as LPG is today," he said.

From a high of USD 1,230 per tonne in March 2012, global prices have consistently averaged to around less than USD 500 in the past few years, he said.

At the same time, over the past few years, India also ramped up its LPG production with almost half of the LPG consumed in the country being produced locally.

In 2018-19, Indian LPG consumption stood at 24.9 million tonnes, out of which 12.8 million tonnes was produced in the country.

"Apart from significant local production capacity, India has very established LPG import partners in Saudi Arabia, Qatar, and the US, among others," he said.

He said auto LPG is been cheaper than petrol by almost 45-50 per cent. Also, auto LPG has almost 50 per cent lesser particulate matter (PM) emissions than CNG and petrol and 80 per cent lower PM than diesel, with lower CO2 emissions.

Also, LPG has been classified by the United Nations Intergovernmental Panel on Climate Change (UNIPCC) for having a global warming potential of zero, implying that is not a greenhouse gas.

"LPG is the most widely used alternative fuel in the world, with a proven track record of improvement in air quality. The global consumption of auto LPG has risen by over 40 per cent over the past 10 years, fuelled by environmental concerns.

"While the use of CNG as an automotive fuel is limited to a handful of nations, usage of LPG as an automotive fuel is widespread with almost 70 countries using auto LPG to power their vehicles," he said.