GAS | DISTRIBUTION

- LPG

SECTOR OVERVIEW

March 2019

SECTOR | CONTENTS OUTLINE

❑ Energy supply chain | chunk secured by LPG

❑ LPG – Supply Sources

❑ LPG Production (Last five year’s trend and last six months)

❑ LPG Imports (top players in last six months)

❑ LPG Consumption | Sectors & Provinces

❑ LPG Marketing Companies – Fragmented industry

❑ LPG – Pricing Mechanism (regulated by OGRA)

PAKISTAN | PRIMARY ENERGY SUPPLY CHAIN

Primary Energy Supply

Oil 34.4%

LPG

1.3%

LNG import

5.6%

Gas

37.9%

• Pakistan’s energy supply consist of

various sources

• Oil and Indigenous gas secure

major chunks by fulfilling 34.4%

and 37.9% of the country’s energy

needs

• Other sources include Coal 8.1%,

Hydroelectricity 9.7%, Nuclear

electricity 2.1% etc.

• Imported LNG fulfills 5.6% of the

country’s energy needs

• For year 2016-17, LPG secured

1.3% of the country’s needs

Source: Pakistan Energy Yearbook 2017

PAKISTAN | LPG | SUPPLY BY SOURCE

Year 2012-13 2013-14 2014-15 2015-16 2016-17

Refineries 205,262 205,963 191,664 174,413 178,333

Field Plants 218,031 264,629 276,891 467,077 488,874

Imports 68,408 71,093 145,634 372,850 461,426

Total 491,701 541,685 614,189 1,014,340 1,128,633

Growth 5.43% 10.2% 13.4% 65.2% 11.3%

• Three sources of LPG – supply from field plants and imports augmented over the

years

• Sizable surge witnessed in 2015-16 in supply from field plants is due to addition of

10 new field plants. Furthermore, JJVL’s production increased manifolds.

• However, in CY18 JJVL’s production is almost none due to closure of major

operations on account of technical issues on field.

Source: Pakistan Energy Yearbook 2017

PAKISTAN | LPG | PRODUCTION

Sr.

#

Players 2HCY18

1. OGDCL 135,399

2. MOL 84,764

3. PARCO 63,768

4. PPL 47,711

5. BYCO 34,205

6. UEPL 11,583

7. POL 8,419

8. PRL 6,632

9. NRL 4,174

10. ARL 1,520

11. OPL 1,323

12. JJVL -

Total 399,499

• During 6MCY18, Pakistan produced 399,499

MT of LPG (top players only)

• Top LPG producing player was OGDCL (share:

~34%)

• MOL and PARCO had respective share of 21%

and 16%

Source: OGRA Website, LPG department, Production data

12%

34%

16%

21%

2%

0%

2%

3%

0%

0% 1% 9%

PPL

OGDCL

PARCO

MOL

POL

OPL

PRL

UEPL

ARL

JJVL

PAKISTAN | LPG | MAJOR IMPORTS

Sr. Players 2HCY18

1. Pyramid Gas 39,256

2. Hazara LPG 23,545

3. Ayan Energy 19,482

4. Alliance Energy 15,765

5. Havelet Gas 15,687

6. Burshane 5,470

Sub - Total 119,204

Total 126,819

• During 6MCY18, total 23 LPG companies

imported LPG which amounted to 126,819 MT

• Out of which major six players imported

119,204 MT; remaining players secured lesser

chunk

• Pyramid Gas secured 31% share out of total

imported quantity

Source: OGRA Website, LPG department, imported data

31%

15%5%

19%

12%

12%

Pyramid Gas

Ayan Energy

Burshane LPG

Hazara LPG

Havelet Gas

Alliance Energy

PAKISTAN | LPG | CONSUMPTION BY SECTOR

Source: Pakistan Energy Yearbook 2017

488,416541,233

699,153

1,118,790

1,209,420

2012-13 2013-14 2014-15 2015-16 2016-17

Domestic Commercial Others Total

• Pakistan’s LPG consumption increased by 8% in FY 2016-17

• Growth was mainly lead by ‘Other’ as it witnessed ~18% uptick in FY 2016-17 as LPG is

sold in cylinders; easily to use and transport

• Domestic and commercial sector’s growth clocked in at ~6% and 4% respectively

LPG | CONSUMPTION BY PROVINCES

For the year 2016-17 MT

Sr.# Province/ Region Domestic Commercial Industrial

1. Punjab 54.6% 72.9% 82.7%

2. Sindh 4.1% 10.0% 8.2%

3. KPK 14.9% 3.3% 3.3%

4. Baluchistan 2.1% 1.9% 3.9%

5. AJ Kashmir 8.1% 4.9% 0.2%

6. FATA 4.6% 2.1% 0%

7. Northern Area 9.9% 2.9% 0.5%

8. Federal Area 1.7% 1.9% 1.1%

Total 100% 100% 100%

• Majority domestic

consumption lies

with Punjab

Province – most

populous province

• LPG is being used

in industries like

textile, ceramic

industry, steel and

furnace, power

generation

companies, glass

industry, edible oil

industry, beverage

industry and

chemical industry

Source: Pakistan Energy Yearbook 2017

LPG | CONSUMPTION BY PROVINCES

For the month Mar-18 MT

Sr.

#

Province/

Region

Domestic Commercial Industrial

1. Punjab 50.9% 68.5% 72.4%

2. Sindh 5.9% 11.3% 13.1%

3. KPK 14.2% 5.5% 4.8%

4. Baluchistan 2.4% 2.7% 8.6%

5. AJ Kashmir 8.0% 4.8% 0.3%

6. FATA 6.6% 2.5% 0%

7. Northern

Area

10.7% 3.6% 0%

8. Federal Area 1.2% 1.3% 0.8%

Total 100% 100% 100%

Source: Pakistan Energy Yearbook 2017

• LPG consumption

by provinces for the

month of Mar-18

remained largely

same with earlier

composition

• Majority

consumption secured

by Punjab province

in all three areas

Domestic,

commercial and

industrial.

• Majority offices of

LPG marketing

companies are

located in punjab

PAKISTAN | LPG MARKETING COMPANIES

• In Pakistan, total 168 companies have license for LPG marketing by OGRA. Hence, it’s

a highly fragmented industry with players having diluted market shares.

• LPG marketing companies have specific brand names – specified with the license

• Each LPG marketing company has several ‘Authorized Distributors’ – authorized by

OGRA to sell on behalf of the company. Total number of distributors is around 5,000 for

the industry.

• 51 companies have head offices located in Lahore while 43 are located in Islamabad;

Karachi has 17 LPG Marketing Companies’ head office while 6 are located in Quetta

• All of these players have several zonal offices, sale points and warehouses – this

facilitates end consumers as this gas is easily available in cylinders

• Cylinders comes in various sizes: 6KG, 11.8KG, 45KG, 200KG (may vary from player

to player); some players sale and transport in bulk (through tanks)

Source: OGRA Website/ LPG Department

PAKISTAN | LPG | PRICING MECHANISM

• OGRA, after letter by Ministry of Energy (petroleum division) started notifying price of

indigenous LPG, maximum producer price, margins of marketing / distribution companies

and consumer price since February 2018. However, producers, marketing companies and

distributors may sell below the maximum price determined from time to time.

• Producer’s price includes excise duty of PKR 85/M.Ton. Upon it, marketing/ distribution

margin, petroleum levy and GST are topped up.

Source: OGRA Website/ Prices/ LPG prices

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

PKR

per M

T

DISCLAIMERPACRA has used due care in preparation of this document. Our information has been obtained from sources

we consider to be reliable but its accuracy or completeness is not guaranteed. The information in this

document may be copied or otherwise reproduced, in whole or in part, provided the source is duly

acknowledged. The presentation should not be relied upon as professional advice.

Analysts Jhangeer Hanif

Unit Head | Ratings

jhangeer@pacra.com

Sehar Fatima

Supervisory Senior | Ratings

Sehar.Fatima@pacra.com

Contact Number: +92 4235869504

Bibliography