1. 09.10.09

2. LP Gas Chain Distributor to End-Consumer CurrentChallenges Future Future Dimensions Dimensions

3. India – a major consumer of LP Gas World’s 4 th largest market after US, China and Japan, consuming 4.6% of world LP Gas Serving 108 million customers, covering around 55% of country’s households LP Gas in cylinders is delivered at every customer’s house Safety checks built-in at all stages, i.e., cylinder filling, transportation and final delivery Umbrella insurance is provided to all customers Consumption is growing and is expected to grow at 7% per annum

4. Agenda LP Gas Value ChainLP Gas Value Chain Distribution Zone: Components, ModesDistribution Zone: Components, Modes LP Gas Distribution in India:LP Gas Distribution in India: Market Scenario, Complexities Market Scenario, Complexities Future OutlookFuture Outlook

5. LP Gas Value Chain

6. Production Transportation Bottling Distribution Multiple Sources Multi-Modal Transport Multiple Source & Transport Multiple Source & Transport Home delivery to diverse customers, thru reseller Home delivery to diverse customers, thru reseller Retailing challenge

7. REFINERIES FRACTIONATORS IMPORTS ROAD RAIL PIPE LINE DOMESTIC CUSTOMERS DISTRIBUTOR BOTTLING PLANT The LP Gas Value Zone DIRECT CUSTOMER Production Transportation Supply Distribution

8. The last mile LP Gas Distributor Showroom Godown DeliveryBoys DeliveryVehicles Distribution Customer’sHome Industries Hospitals Hotels / cafeteria Automobiles CashHandling Safetycheck Refill Bookings Delivery scheduling Delivery scheduling Grievance redressal Grievance redressal EmergencyService Manual Mechanized Cylinder Installation

9. Cylinders Home delivery Households / Kitchen Reticulated System Cylinder bank / bulk storage via pipeline network within premises Housing Society / Multistoried towers / Multiplexes Modes of last mile delivery PackageModeDestination Upcoming Scenario : Migration from LP Gas to Natural Gas in cities City Gas Distribution Pipeline network – Hub & Spoke Cities / Gas stations

10. LP Gas Distribution in India

11. Indian LPG Market – features and complexities Domestic segment (90% of LP Gas) is catered to by national oil companies Industrial and commercial market opened in 1993, is competitive with multiple marketeers Complex market without segregation on income, per- capita expenditure, family size, spending habits etc.

12. Indian LPG Market – features and complexities Average household consumes 108 kg LPG per year. High degree of correlation between LPG consumption and National Income. Domestic LPG is subsidized; measures taken to ensure benefits to intended beneficiaries.

13. Indian LPG Market – features and complexities LPG cylinder an item of high significance and low price (subsidized). Urban / semi-urban centric market, focus getting shifted to rural. No economic substitute for LP Gas for cooking in cities; Piped Natural Gas emerging in phases.

14. LPG Consumption LPG Consumption (1980/81 – 2008/09) Annual growth 1980s = 19 % 1990s = 11 % 2000s = 7 % Figure in Thousand tons Quantum jump @ 20% (1999-2000) Lowest growth @ 2.1% (05-06) 4% growth per annum Currently coverage is 55% of country’s Household; Plan to take it to 75% by 2015

15. LPG Domestic Consumers Figure in 100 thousand (1980/81 – 2008/09) 108 million Domestic Consumers 5 million customers added every year 9% growth per annum

16. LPG Distributors LPG Distributors (1980/81 – 2008/09) 9.3 thousand Distributors NOCs appoint Distributors, under uniform policy, based on market share.

17. Future Outlook

18. Technological Up-gradation User-friendly, fuel efficient equipments with enhanced safety features introduced Fuel Efficient Stove Multi-function Pressure Regulator Low yield valve Anti-theft device

19. Potential Growth Areas High rural market penetration by a Distributorship appointment scheme: ‘Rajiv Gandhi Gramin LPG Vitrak’ Industrial use to increase from 4%, in line with global 12%; China 24% and Japan 29%. Auto LPG to grow with increased introduction of LP Gas run vehicles by manufacturers like Maruti, Tata Motors, Hyundai and Bajaj.

20. Enhanced Customer Convenience Refill booking through mobile, internet etc System based customer grievance redressal mechanism For enhanced customer service, Government Control order and market discipline guidelines are applicable.

21. Vision 2015 Consumer Satisfaction & Beyond Customer focused Vision 2015 formulated by Government of India Enrolment of 55 million customers in 5 years Massive rural penetration plan to cover 75% household from the current of 55%. India will consume 15 million ton of LP Gas from the current level of 11 million ton.

22. An exciting time for LP Gas marketing in India