lpg segment
TRANSCRIPT
Indian LPG Industry
By:Priyanka Yadav (411)Sumana Sinha (449)Mansi Ahuja (429)Venkateswarlu A (423)
Overview of Presentation
Indian LPG scenario
Case description
Question no-1
Question no-2
Conclusion
Gp No-1 Indian LPG Industry 2
Indian LPG scenarioLPG Marketing Commenced in India in 1955
Started by Burmah Shell in Mumbai LPG was initially used mainly for the purpose of
cooking State Owned Enterprises (SOEs) commenced
LPG distribution in 1965Later LPG also marketed for following purposes
Non Domestic LPG Industrial Bulk Transport (Auto LPG)
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Indian LPG scenario contd…Domestic LPG is primarily being sold at
subsidized prices Private Enterprises also entered but mainly in
other than domestic segmentThe household sector consumes about 90% with
the remaining 10% diverted to industrial and other uses
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Case descriptionLPG was introduced in India as a domestic fuel in the early 1960s. Government-owned corporations handled the production and marketing of LPG until the economic reforms of the early 1990s. As a part of liberalization process in the early 1990s, the Indian govt opened up the LPG business to private entrants in 1993. To provide a legal framework to regulate private entrants, the government implemented the LPG order in 1993. This order enabled private marketers to import, store, bottle and market LPG at market determined prices. There are many challenges faced by a private entrant in the LPG segment. The most difficult challenges is to break the monopoly of public sector companies. As long as the govt subsidizes public sector companies and private companies have to pay high import duties, private entrants will find it very difficult to establish themselves in the LPG market.
Suppose a multinational company wants to enter the LPG market. It consults a marketing research firm to aid this. As a research analyst of the firm:
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Question - 1
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Prepare a detailed report using descriptive statistics on the marketing aspects of LPG
Types in Statistics
• Descriptive Statisticsis the process of describing data and trying to reach a conclusion based on
it• Inferential Statistics
is a scientific procedure to make inferences about a population based on a sample
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Segments of Indian LPG industry
o Domestico Non Domestico Industrialo Transport
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From the Pie chart diagram we can conclude that the major segment is Domestic and followed by Non Domestic, industrial and Transport
Region wise Market Share of LPG industry
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From the Pie chart diagram we can conclude that the North region is having highest market share and East region is having lowest market share
34
30
24
12
Share %
WestNorthSouthEast
Market growth rates of the LPG industry
1990-91 to 1996-97
1996-97 to 2001-02
2001-02 to 2006-07
2006-07 to 2009-10
2009-10 to 2014-15
0
4
8
12
16
20
5.3
18.6
10.2 10.4 10
Market growth
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From the above line graph we can conclude that the market growth has substantially increased from 1990 to 2002 after that it is increasing on average of 10%
Customer strength in Domestic segment grew from 10 mill (1985-86) to 166 mill (2013-14)
Market growth rates of the LPG industry
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Consumption increased from 1.2 MMT in 1985-86 to 15.9 MMT in 2013-14
LPG Supply Demand – Present Situation
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Sourcing of LPG : Trends
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LPG Supply Demand – Future Outlook
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GDP from Petroleum Sector
2005-06 2006-07 2007-08 2008-09 2009-10 2010-110.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%2.85% 2.91% 2.82% 2.72%
2.35% 2.40%
GDP
GDP
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Competitors
Players in Indian LPG Industry
The major players in LPG marketing are 3 State Owned Enterprises (SOEs) Indian Oil Corporation Ltd (IOCL) Bharat Petroleum Corporation Ltd (BPCL) Hindustan Petroleum Corporation Ltd (HPCL)
Private Enterprises (PE) Aegis Gas Aegis Logistic Indian Oil Petronas Pvt. Ltd (IPPL) Reliance Industries Ltd (RIL) SHV Energy SHV LPG TOTAL Oil India Pvt. Ltd Hindustan Aegis
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37.3
36.6
12.4
8.05.8
Market Share
ONGC
RIL
IOCL
BPCL
GAIL
Market share of key competitors
ONGC RIL IOCL BPCL GAIL0
50000
100000
150000
200000
250000
300000271893 266717
90077
5809942229
Market Capitalization
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Commercial and Industrial sales
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04-05 05-06 06-07 07-08 08-09 09-100
200
400
600
800
1000
1200
1400
353.1446
653.3831.6
963.5
1158.2
Sales in TMT
Sales in TMT
Suggestion to Foreign Entrant
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Heavy subsidy on domestic LPG creates a no entry
for any private player
For a foreign entrant there is great scope in the non-
subsidized commercial and industrial section
An auto gas (LPG) is a cost efficient fuel and holds
scope for the private players as it is not subsidized
Question - 2
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Specify the kind(level) of data with regard to the ranking of lead players in the market as shown in following table
Company Share (%)
IOCL 40
HPCL 20
GAIL 13
ONGC 12
BPCL 11
Others 4
Levels of Data Measurement
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Nominal Level: When data are labels or names used to identify elements.
Ordinal Level: Here, labels also signify rankings.
Interval Level: The difference between two consecutive numbers counts as well.
Ratio level: In addition to the properties of interval level, ratio is also meaningful.
Levels of Data Measurement
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By analyzing the above table, we find that the data is given in Interval Level
Company Share (%)
IOCL 40
HPCL 20
GAIL 13
ONGC 12
BPCL 11
Others 4
Question - 3
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Take a proportionate sample from four regions of the country and through a well structured questionnaire , highlight the positive and negative features of the products and services existing in the market
Steps in Sampling
Target population must be defined
Sampling frame must be determined
Appropriate sampling technique must be selected
Sample size must be determined
Sampling process must be executed
Stratified Random Sampling
In stratified random sampling, elements in the population are divided into homogeneous groups called strata. Then, researchers use the simple random sampling method to select a sample from each of the strata.
Homogenous Data
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Area No of Customer
Saket 10000
Sangam Vihar 15000
Malviya Nagar 16000
Khanpur 20000
Conclusion
At present, Indian LPG market is government
dominated and degree of competition is very low. Cost
of domestic LPG is subsidized while for commercial and
industrial, its market determined. The ratio of
customers of domestic and non-domestic LPG is 9:1.
Demand for LPG is growing at a rate of 6% per annum
where as supply is not constant and gap is filled by
imports.Gp No-1 Indian LPG Industry 28