Indian Autogas industry analyses the current scenario and calls for more incentives

There have been recent reports flagging a sharp decline in sales of LPG vehicles since 2019 in India. A top automaker has even said to have stopped the manufacturing of its LPG-powered models. For a country that is home to the largest number of polluted cities in the world with nearly 15% of its pollution coming from transport sector, the dipping sales in Autogas is concerning. After all, it is said to be the third-most popular vehicle fuel after petrol and diesel worldwide due to its environmental and cost benefits.

Over decades, some of the most advanced regions or countries in the world including Europe, Australia, Japan, Russia, Italy, South Korea, Turkey, Bulgaria and the United States have seen the development of a well-oiled Autogas ecosystem as a significant alternative to the conventional fossil fuel-based petrol and diesel. While Europe has 15.7 million vehicles powered by LPG and serviced by a 47,000-strong refuelling stations, a whopping 95% of taxis in South Korea run on LPG, says a report from the Indian Auto LPG Coalition (IAC).

Similarly, 50% of taxis in Australia as also most taxis in Japan run on this fuel. And in the US too, LPG has seen demand from vehicle fleets including school buses, goods delivery and other government and non-government agencies. In Turkey, almost 40% of passenger vehicles and 26% of all vehicles run on Autogas. In Bulgaria, as much as 90% of LPG is consumed as a vehicle fuel.

However, the Indian government has incentivised electric and CNG vehicles, and Autogas has always been a non-subsidised fuel in the country despite it being one of the cleanest. “Vehicles running on Autogas not only produce 90% fewer particulates and 98% lesser nitrogen oxides emissions than petrol-powered vehicles, but also up to 20% less CO2 than equivalent petrol models, all of which cannot be overlooked by any government,” according to the IAC.

“For years now, we have been imploring the government to allow LPG a level-playing field in the Indian auto fuel market as a part of its broader low-carbon energy transition as well as mobility strategy. If LPG can turn out as the most preferred and used fuel after petrol and diesel in most other parts of the world, what is it that prevents India from taking the LPG route in a more vigorous and sustained manner,” said Suyash Gupta, Director General of the Indian Auto LPG Coalition.

“The price of LPG has been consistently below the price of the carbon-emitting petrol and diesel in our country. In fact, the price differential in some regions particularly the south Indian market has come down to nearly 50% in recent times. Yet, traction is yet to be seen for a shift to this near-perfect clean fuel alternative. So, just as other developed and high-income countries have promoted extensive LPG use through policy intervention, whether for commercial or personal use, India must also provide sufficient policy stimulus,” he added.

The association also suggests the authorities to reduce the payback period or the breakeven distance for a vehicle owner to opt for either converting his existing petrol vehicle, or for purchasing a high-cost factory-built variant. For conversion, “it is time to reduce the exorbitant 28% GST on conversion kits and relax Type approval norms for them, process which is highly costly as well as tiresome. Similarly, OEMs must be encouraged through bringing down GST on Autogas and other incentives,” IAC concluded.

Source: Press Trust of India

19 July 2023