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HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE

HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE 25 th March 2010, Islamabad. SOHAIL A. QURAISHI CHIEF EXECUTIVE. Total Size of World Market: Year 2008 242 Million Tons Year 2012 270 Million Tons Total Size of Pakistan Market Year 2008-09 Sales was 570,000 Tons

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HOW to GROW the LPG MARKET in PAKISTAN 4 TH INTERNATIONAL LPG CONFERENCE

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  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. Total Size of World Market: Year 2008 242 Million Tons Year 2012 270 Million Tons Total Size of Pakistan Market Year 2008-09 Sales was 570,000 Tons This is 0.25% of World Market It is at a low level of 2.6 Kg/Capita LPG GLOBAL MARKET SHV Energy Pakistan

  3. LPG Per Capita Consumption (Kg) SHV Energy Pakistan

  4. Million Tonnes GLOBAL LPG PRODUCTION TRENDS Million Tonnes SHV Energy Pakistan

  5. Million Tonnes GLOBAL LPG CONSUMPTION TRENDS SHV Energy Pakistan

  6. Major LPG Exports are from Mid-East In Year 2010 33 Million Tons In Year 2012 40 Million Tons Global Consumption in Year 2012 is 267 Million Tons A surplus of 3 Million Tons is expected in Mid-East MAJOR LPG EXPORTERS SHV Energy Pakistan

  7. Million Tonnes MAJOR LPG EXPORTERS SHV Energy Pakistan

  8. Domestic and Commercial 46% Feedstock 32% Transport 9% Industry 11% GLOBAL CONSUMPTION BY SECTOR SHV Energy Pakistan

  9. Global Consumption by Sector 2008 SHV Energy Pakistan

  10. 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. PAKISTAN LPG MARKET 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) SHV Energy Pakistan

  13. 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 REASONS FOR LPG MARKET CONTRACTION SHV Energy Pakistan

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

  15. 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 GOP POLICY CHANGES TO GROW THE BUSINESS SHV Energy Pakistan

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

  17. 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 OGRA REQUIRED INITIATIVES SHV Energy Pakistan

  18. 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. LPG SAFETY SHV Energy Pakistan

  19. 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 Recommendations SHV Energy Pakistan

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