State-run oil marketing companies (OMCs) are expected to have an additional capacity of 1,242 metric tonnes per annum (TMTPA) in their LPG bottling plants by the start of FY22 through six brownfield and 10 greenfield projects, according to data from the ministry of petroleum and natural gas. The existing capacity is 23,514 TMTPA among 228 bottling plants for the three OMCs—IndianOil, Bharat Petroleum and Hindustan Petroleum. The proposed increase comes at a time when the country’s consumption is expected to increase, given the NDA government’s push towards a gas-based economy and move towards clean cooking fuel. The government has launched the Pradhan Mantri Ujjwala Yojana (PMUY) to provide subsidised LPG connections to women belonging to the below-poverty-line category. The flagship scheme has made strides since its launch in May 2016 and the first-year target of providing 1.5 crore connections was achieved within eight months. OMCs in the last financial year released 3.25 crore new LPG connections of which around 2 crore were under PMUY. During FY16-17, LPG consumption in the country increased by 9.8% to 21.5 million tonne.
Though the increase in capacity over the next four years—between 2017 and 2021—may be a mere 5.2%, analysts believe it will be enough to meet the country expected demand. “All bottling plants in India are operating over their capacity as a lot of manual work has been done away with and improved technologies—such as carousel instead of conveyor belts—are being used,” said Deepak Mahurkar, partnet, PwC.
Leading the capacity expansion will be IndianOil which will add 360 TMTPA capacity through six brownfield augmentation projects and another 540 TMTPA through six greenfield commissioning. However, while Hindustan Petroleum will add 342 TMTPA capacity through four greenfield plants—of which two are resite plants—Bharat Petroleum will add no more capacity to its 5,507 TMTPA capacity from 62 bottling plants. IndianOil’s current capacity is 11,905 TMTPA (106 plants) while that of Hindustan Petroleum is 6,102 TMTPA (60 plants).
While IndianOil’s greenfield projects will be commissioned in Motihari, Nagaon, Jodhpur, Jhansi, Aizawl and Chitoor; Hindustan Petroleum will be commissioning plants in Jodhpur, Khapri, Kargil and Naogaon. Of these, Jodhpur and Khapri will be resite plants—existing facility moved to new location for enhanced capacity.
IndianOil capacity augmentation will be done at its plants at Bongaigaon, Shahjahanpur, Khurda, Banka, Bathinda and Changelpet. According to Mahurkar, the new plants will be used to cater to the northeastern region and the hinterlands across India where steadily LPG will increase over time, thanks to PMUY.