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  • Consumers look for alternative fuels amid rising petrol/diesel prices: At almost 40% cheaper than petrol, Auto LPG holds much promise

    Published on March 10, 2021

    New Delhi: As petrol and diesel reach record high prices, the market is ripe for economical alternative transport fuels such as Auto LPG that can help consumers save fuel costs without compromising on vehicle performance.

    Indian Auto LPG Coalition, the apex body representing Auto LPG suppliers in India says Auto LPG which is one of the cleanest and most economical gaseous fuels can emerge as a prominent alternative choice if supported by the right messaging and policy action. Here also lies an opportunity to promote the environment-friendly fuel and bring about improvements in urban air quality.

    Petrol prices have in recent weeks been unprecedentedly hovering close to the Rs 100 mark, creating much discomfort among consumers. On the other hand, Auto LPG is priced at almost half of both the mainstream automotive fuels. In terms of running costs, it has consistently been atleast 40% cheaper than petrol. This gives consumers who drive on Auto LPG a major cost advantage. With such a huge cost margin, consumers who chose to convert their vehicles to Auto LPG could recover their investments in conversion kit installation within 6 months, dependent on the Auto LPG price in their city.

    “Conversion kit providers are already reporting a rise in queries from consumers looking to convert their personal vehicles to Auto LPG or CNG. With skyrocketing fuel prices putting a major economic burden on consumers’ pockets, more consumers today are scouting for either alternative modes of transport or economical alternative fuels. Herein lies an opportunity to create a behavioral shift towards clean and environment friendly fuels like Auto LPG. A small policy push supported by appropriate messaging can enable a lot of people to convert their personal vehicles to Auto LPG which is the third most widely used automotive fuel globally,” said Mr Suyash Gupta, Director General, Indian Auto LPG Coalition.

    Auto LPG comes with the additional benefit of being an environmentally friendly fuel with almost 50% lesser PM emissions than CNG and Petrol and 80% lower PM emissions than Diesel.  Vehicles using Auto LPG as fuel also emit much lower CO2, making Auto LPG one of the most eco-friendly fuels on the block.

    “What we need is a policy push to encourage consumers to make the clean switch. Unfortunately, Auto LPG/CNG conversion kits are taxed at a prohibitive GST rate of 28%, a policy that is dichotomous to the government’s commitment to clean energy. Cutting down this prohibitive GST rate on conversion kits will make conversion kits more affordable for mass usage. The government must also consider subsidizing conversion kits for consumers as a move towards incentivizing personal vehicle users to shift to clean gaseous fuels at a mass level,” added Mr. Gupta.

    Even in terms of price movement, LPG prices do not exactly follow crude pricing since more than 60 percent of global LPG is sourced from gas. And with the amount of LPG which has come onshore after US shale gas came into the picture, the supply scenario has also been very positive. While Electric Vehicles still remain a distant reality, Auto LPG is readily available and can be deployed anywhere without the need for any infrastructure creation. This economic as well as clean fuel can act as a vital bridge between our current fuels and EVs.

    Apart from consumers, OEMs who are struggling with an economic downturn can also benefit by investing in Auto LPG variants at this crucial time when consumers are looking to use eco-friendly less cost-effective fuels. With increased availability and continued lower pricing of the fuel, consistently costing almost 50% lesser than the price of Petrol, LPG variants could be the next big star performers in their portfolios.