LPG Tank manufacturers and entrepreneurs who are part of the LPG industry are excited for its growth but are concerned about the challenges facing the industry as well. Economic growth in India is propelling the growth of the LPG industry in the country. There is a rise in the LPG filling stations installations and LPG bottling plant installation.
Today, the LPG industry is divided into industrial, commercial, transports and domestic segments. As per a recent report, Indian consumers use 21.2 million tons of LPG of which 90% is used as cooking fuel. In the midst of concerns such as global warming and sustainable energy needs, LPG is a clean gas which can have enormous significance in the country.
Some of the key challenges in the LPG sector are as follows:
- Correct Positioning
LPG is a clean burning energy that consists of 60% natural gas and 40% fossil fuels. Among other energy sources such as petrol, kerosene and diesel, the positioning of LPG should be that of a clean energy. The multiple applications of LPG as a green fuel or clean energy should be highlighted to promote its usage.
- Cost of storage, transport and distribution
To meet the demand in remote areas, the transport infrastructure should be in place. But there are still many regions where transportation costs for LPG is high and it becomes difficult for LPG service providers to manage the supply. LPG requires specialised equipment such as LPG tank installations to store it, package it and distribute it.
The returns from the industry should justify the investments for LPG service providers to open more LPG service centres and for more people to have easy accessibility to LPG. There is a need for initiatives that will make LPG businesses safe and sustainable for entrepreneurs and affordable for end users.
- Quality of alternate energy sources
Earlier, the quality of LPG was competitive compared to petrol and diesel. But research has improved the quality of petrol and diesel. The quality edge that LPG industry once had isn’t working for it anymore.
Switching pattern of fuel usage
- Transition for consumers
Consumers who have been using traditional sources of energy such as firewood, coal, and others need time to adapt to the use of LPG. Adequate awareness is required to educate these users about the benefits of LPG and the ways to safely use it. Awareness will help members of the LPG industry to tap into different markets and boost the growth of the LPG industry.
Competitive pricing, cleanliness and efficiency are determining factors for people to choose a specific energy for usage. Rising income and mobility between rural and urban areas also has an impact on the energy usage behaviour in the country. LPG Tank manufacturers and other businesses operating in the LPG sector along with industry bodies and government initiatives are trying to change the perception of potential consumers through promotional messages.
As per an industry report, in 2016-17, 33.2 million households were enrolled in to LPG usage in India through the Pradhan Mantri Ujjwala Yojana. Government initiatives like these have led to an increase in the LPG tank installations in India and are trying to ease the difficulties in the LPG sector. The LPG penetration into rural areas is changing the fuel usage behaviour in the country.
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