1. HOW to GROW the LPG MARKET in PAKISTAN
4TH INTERNATIONAL LPG CONFERENCE
25th March 2010, Islamabad
SOHAIL A. QURAISHI
CHIEF EXECUTIVE
SHV Energy Pakistan

2. LPG GLOBAL MARKET Total Size of World Market:
Year Million Tons
Year Million Tons
Total Size of Pakistan Market
Year Sales was 570,000 Tons
This is 0.25% of World Market
It is at a low level of 2.6 Kg/Capita
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3. LPG Per Capita Consumption (Kg)
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4. GLOBAL LPG PRODUCTION TRENDS
Million Tonnes
Million Tonnes
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5. GLOBAL LPG CONSUMPTION TRENDS
Million Tonnes
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6. MAJOR LPG EXPORTERS Major LPG Exports are from Mid-East
In Year Million Tons
In Year Million Tons
Global Consumption in Year 2012 is 267 Million Tons
A surplus of 3 Million Tons is expected in Mid-East
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7. MAJOR LPG EXPORTERS
Million Tonnes
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8. GLOBAL CONSUMPTION BY SECTOR
Domestic and Commercial 46%
Feedstock %
Transport 9%
Industry %
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9. Global Consumption by Sector 2008
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10. PAKISTAN LPG MARKET Total Market is Contracting
(23%) over last four years
No. of Marketing Companies has grown
From 16 in 2004 to 83 Now (Increase of +500%)
Major Conversion of Auto Market to CNG
Smuggling of Substandard LPG from Iran/Turkmenistan etc.
SHV Energy Pakistan

11. LPG Sales Volume 649 602 583 567 500 (*) 452 415 SHV Energy Pakistan
(*) Annual projections based on Jul-Dec’09 volume – 250 K

12. Low Level of LPG Imports (2003-10)
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13. REASONS FOR LPG MARKET CONTRACTION
CNG Market Expansion
NG Expansion in Domestic Market
4 Million Consumers in Year 2004
5.6 Million Consumers in Year 2009
Lack of Investment in Cylinders in LPG Downstream Market
Imports Uneconomic and Uncompetitive
Decline in local LPG Production
SHV Energy Pakistan

14. Auto Fuel Comparison SHV Energy Pakistan
Data based on commonly used kits for use in 1000 CC Car

15. GOP POLICY CHANGES TO GROW THE BUSINESS
Import Parity Pricing thru reduced GST both at Import & Supply Stage (No Revenue Loss to GOP due to higher imports)
To allow all players to have adequate volume
To control prices through competition
Clear Policy on Comparative Fuel Taxation and Pricing
Legislate against cross-filling of Cylinders
Controls on Smuggling of LPG
SHV Energy Pakistan

16. LPG Competitiveness with Other Fuels
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Fuel Prices as at 3rd March’2010

17. OGRA REQUIRED INITIATIVES
A LPG Consumer requires a safe, economic and correctly filled cylinder. For this:
Cylinder Cross-filling needs to be stopped by linking Company sales to stock of cylinders available*
Correct LPG weight is filled
Ban on Manufacture and Sale of small non-company owned cylinders
Re-qualification of cylinders
Control Sub-standard LPG Smuggled from Iran/Turkmenistan etc
Control ‘Decanting’
*For current market conversion to domestic from Auto about 3 Million more cylinders are required costing 5.5 Billion Rupees
SHV Energy Pakistan

18. LPG SAFETY
Compliance to Codes & Standards throughout the Distribution Chain
Pressure Vessels to be manufactured with prescribed steel only
Use of genuine UL Listed valves only for LPG Plants / Vessels
LPG Tankers to comply with International standards like ADR, COP2 and BS 7122 etc.
Re-qualification of all LPG Vessels (Both Static / Mobile) to be carried out only by API 510 certified inspector.
3rd Party Inspection Bodies with foreign accreditation
Only certified inspectors to be authorized by OGRA for inspection of pressure vessels.
SHV Energy Pakistan

19. Recommendations
To Grow the LPG market, support from Government and Regulator is required for:
Increased LPG supplies thru imports by rationalizing GST structure
Safety Implementation throughout the LPG distribution chain
Clear Policy on Tax/Price on different fuels to allow investment by companies
Control Smuggling
SHV Energy Pakistan