Auto LPG: New hope for oil cos

With the West Bengal government banning 15 year-old commercial vehicles from running on the roads in the metropolis and its suburbs, oil companies, which incurred losses for about a year have at last found a ray of hope for marketing auto LPG in the state.

With CNG unlikely to be available in the state in the near future, auto LPG was the only option available to check pollution from old vehicles.

Since Indian Oil Corporation opened the first auto LPG outlet in Kolkata last year, five more refill stations came up in the city but sales did not pick up.

Six outlets together sold only 70 tonnes of auto LPG when a refill station should sell at least 40 tonnes a month to reach break-even point, IOC sources said. At present, only 1,000 city autorickshaws and about 200 cars are auto LPG fuelled, the sources said.

However, with the state government banning all pre-990 transport vehicles to check pollution, oil companies are now gearing up to meet the demand emanating for auto LPG.

Gautam Dutta, general manager of IOC said that during a recent meeting with Transport Minister Subhas Chakraborty, oil companies had assured of more auto LPG stations in the city.

"But space is a real constraint for us. If the state government makes required land available, we will construct facilities within six months from the date land is handed over to us," he said.

A transport department official said about 9,000 autorickshaws and over 10,000 taxis would be scrapped after the new order but could continue to run in the Kolkata metropolitan area provided they converted to auto LPG.

The Transport Minister has assured the four oil companies -- IOC, Bharat Petroleum, Hindustan Petroleum and IBP Ltd -- of providing land for six outlets in the depots of the Calcutta State Transport Corporation to cater to the increased requirement of auto LPG.

Agreeing to the state government's proposal of increasing the number of auto LPG outlets in the city, oil companies proposed the required investments be shared between them and the government on a 50:50 basis.

Each refilling station would need an investment of around Rs 40/45 lakh. The state government wanted the oil companies to bear the initial expenditure and later adjust the government's share from its commission to be paid by the companies, the IOC GM said.

Another oil company Bharat Petroleum, which was also approached by the government to add a few more outlets, was not sure about the details.

"We don't know what would be the role of the CSTC since those outlets would be put up in its depots. There should be more fine-tuning of the government proposal," S Banerjee, Manager LPG (East), BPCL, said.

Asked why the sale of auto LPG had not picked up in the last one year in the metropolis despite availability, oil company sources said that perception of danger in running vehicles on LPG might be one reason.

"But it is totally safe to run vehicles on LPG as the conversion kit has enough safety device, including pressure escape valve," the sources said. The cost of conversion kits ranged from Rs 18,000 to Rs 28,000, the sources said.

Cost wise, auto LPG is much cheaper than petrol. Petrol costs Rs 40.89 per litre while auto LPG is priced at Rs 24.20 per litre, the sources said.