Project

CHAPTER ONE

Introduction

Industry Profile

Company Profile

Product Profile

Indane

Introduction

The project titled “LPG Marketing in Guwahati, Assam” and “Quality of services

offered by Indane LPG distributors in Guwahati City” was done in INDANE Area

Office, Guwahati under Indian Oil Corporation Limited (IOCL) North Eastern

State Office [Marketing Division] for the duration of 2 months starting from 5th

May, 2008 till 4th July, 2008.

The Subject of Study:

1 | P a g e

The project involves conducting a marketing survey on LPG costumers of Indane

Gas, IOCL to find out the level of satisfaction of the costumers over the various

services offered by Indane LPG Distributors in Guwahati city.

I have taken a sample of 200 consumers from four major distributors in the city and

conducted a survey on them.

I have also studied the entire distribution chain of Indane Gas in Guwahati City,

IOCL functioning and other products and services offered by IOCL. I have visited a

bottling plant in Guwahati, so that I can gain an insight into the whole LPG

distribution system. I have also studied the major drawbacks in the services offered

by the LPG distributors and have suggested them ways to improve their service.

Theoretical Background:

LPG cooking gas is a necessary part of every household. The demand of such

product is always more than the supply. The price of LPG is set by the Ministry of

Petroleum and Natural Gas (MoP&NG). Indane has a market share of almost 99%

in the region but, soon rival like Bharat Gas and HP Gas are likely to enter the

market in a big way and by providing superior services they will attract customers.

It is very important for IndianOil to find out the satisfaction level of the existing

customers so, that the company can take initiatives to improve their services and

compete with the rivals in the future.

Industry Profile

Liquefied Petroleum Gas (LPG)

This sector is fully open for private sector investment. LPG is mainly used as a

domestic fuel. The government has also permitted use of LPG as an auto fuel.

2 | P a g e

The demand of LPG is increasing day by day. Small towns demand is increasing at

a very fast rate. The requirement of LPG over and above the indigenous availability

is met by imports. Several projects for import facilities are coming up.

Both national and private sector companies like SHV, Shell, Caltex, ExxonMobil,

etc are working in these project.

LPG Marketing in India

LPG’s demand has been always more than its supply. This is due to the limited

indigenous availability and import restriction. In order to bridge the demand supply

gap, the Government has reduced restriction on LPG import, thereby allowing the

private sector to actively participate in the import and marketing of LPG in India.

Types of cylinders being marketed by the PSU Oil Companies

There are 3 types of cylinders being marketed currently:

5 kg (Domestic and Commercial exempted)

14.2 Kg (Domestic and Commercial exempted)

19 kg (Commercial)

The cylinders are manufactured only by the approved manufacturers, under the

supervision of BIS inspectors and are certified by the Controller of Explosives.

Domestic Cylinders are painted in red and Commercial cylinders are painted in

dark blue. The cylinders carry their complete history with regards to serial number,

gross weight, water capacity, ISI monograms, test date, manufacturer identification

and year of manufacture.

3 | P a g e

Classification of customers

The customers are normally classified as under:

a) Domestic Customers: Customers who use LPG for household purposes like

cooking, heating, etc. They are not making any type of monetary gain by

using LPG.

b) Commercial Customers: Customers who use LPG for business purposes like

use of LPG in hotels, restaurants, school, colleges, hospitals, etc.

c) Industrial Customers: Customers who use LPG for the industrial purposes

like production of goods, welding in construction sites, etc. LPG cylinders

offered to such type of customer are big in size. LPG is also directly

transferred from the companies LPG tanker carrier to the tanker situated at

the industry. This is done to reduce the number of cylinders stored.

Domestic and commercial customers take a cylinder and a regulator in loan form

the Oil Company by paying a certain amount as connection charge and security

deposit. After the cylinder get empty the company replace the empty cylinder with a

filled cylinder on the payment of a certain amount by the customer for the

exchange.

It is mandatory for all companies to display the rate of the cylinder and the stock of

full cylinders in the booking office. This is as per the rules of the Packaged

Commodities Act (1975). The price of the cylinders are also mentioned in the

companies’ web site and displayed in the companies’ office.

Customers who want LPG for industrial purposes have to take license from the oil

company. License is granted by the company after proper enquiry. Such customers

4 | P a g e

have to pay deposit on a one time basis and an amount for each refill. The industrial

customers have to follow strict rules and regulations on storage and use of LPG.

LPG Marketing by PSU’s

Liquefied petroleum gas (LPG) is the most clean and convenient domestic cooking

fuel. Its marketing was started in 1955-56. Since then there has been a huge jump in

the consumption of LPG. The LPG customer which was 170 Lakhs on 1991 and 700

Lakhs on 2002 is now more than 1000 Lakhs. With the increase of the production

capacity at some of the existing sources and commissioning of new sources, LPG

production has gone up to 8408 Total Metric Ton (TMT) in 2006-2007 from 2150

TMT in 1990-1991 and 7273 TMT in 2002-2003.

During the year 2006-2007, about 53 Lakhs new LPG connections were released in

the country and presently LPG connections are available on demand.

1.1 Table: STATE-WISE AND COMPANY-WISE LPG DOMESTIC

CONSUMERS

5 | P a g e

*IBP Co. Ltd has been merged with IOCL with effect from 02.05.2007.Source:

Public Sector Undertakings.

1.2 Table: GROWTH OF LPG MARKETING IN THE COUNTRY

6 | P a g e

(TMT-Total Metric Ton)

1.3 Table: PRODUCTION OF LPG IN INDIA

Source: Petroleum Planning & Analysis Cell.

1.4 Table: IMPORT AND EXPORT OF LPG

7 | P a g e


1.5 Table: SALE OF LPG


1.6 Table: AVERAGE ANNUAL COMPOUND GROWTH RATES OF SALES

OF LPG


8 | P a g e

1.7 Table: SUBSIDIES ON LPG

(Rs. Crore)

PRODUCT 1993-94 1994-95 2002-03 2003-04 2004-05 2005-06 2006-07

1 2 3 4 5 6 7 8

LPG -

Packed-

Domestic

1261 1410 3691 2783 1468 1520 1568


9 | P a g e

Indian Oil Corporation Limited

IndianOil. Bringing Energy to Life

Company Overview

IndianOil Corporation Limited is India’s largest commercial enterprise and has

leading market shares in downstream segment of Oil business. Indian Oil

Corporation Ltd. currently secured a turnover of Rs. 247,479 crore (US $59.22

billion), and profit of Rs. 6963 crore (US $ 1.67 billion) for fiscal 2007.

It has the highest ranked Indian corporate in Fortune’s list of World’s 500 Largest

Companies. It has been ranked number 116.

It is the 20th largest petroleum company in the world – Fortune Global 500.

It has got India’s ‘No. 1 Corporate’ in annual listing of Business Standard (BS

1000), Business India (BI Super 100) and Economic Times (ET 500).

IndianOil is India’s Most Trusted Fuel Pump Brand (ET Brand Equity – AC

Neilsen Survey 2007).

10 | P a g e

IOCL has won many prestigious awards like:

National Award for “Innovations in Implementing Business Continuity for SAP R/3

Environment” from Govt. of India, SAP certification to IOC’s Customer

Competence Center and many more.

Overview of Operating Structure

Downstream Operations

Also in Petrochemicals, Exploration & Production and Gas Business

11 | P a g e

IndianOil: India’s Downstream Major

Beginning in 1959 as Indian Oil Company Ltd., Indian Oil Corporation Ltd. was

formed in 1964 with the merger of Indian Refineries Ltd. (established 1958).

IndianOil and its subsidiaries account for 49% petroleum products market share,

40.4% refining capacity

and 69% downstream sector pipelines capacity in India.

For the year 2007-08, the IndianOil group sold 59.29 million tonnes of petroleum

products, including 1.74 million tonnes of natural gas, and exported 3.33 million

tonnes

of petroleum products.

The IndianOil Group of companies owns and operates 10 of India's 19 refineries

with a combined refining capacity of 60.2 million metric tonnes per annum

(MMTPA, .i.e. 1.2 million barrels per day). These include two refineries of

subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and one of Bongaigaon

Refinery and Petrochemicals Limited (BRPL).

The Corporation's cross-country network of crude oil and product pipelines,

spanning about 9,300 km and the largest in the country, meets the vital energy

needs of the consumers in an efficient, economical and environment-friendly

manner.

IndianOil is investing Rs. 43,393 crore (US $10.8 billion) during the period 2007-12

in augmentation of refining and pipeline capacities, expansion of marketing

infrastructure and product quality upgradation as well as in integration and

diversification projects.

12 | P a g e

Network Beyond Compare

IndianOil supply petroleum products to millions of people everyday through a

countrywide network of about 34,000 sales points. They are backed for supplies by

166 bulk storage terminals and depots, 101 aviation fuel stations and 89 Indane (LP

Gas) bottling plants. About 7,100 bulk consumer pumps are also in operation for

millions of customers.

IndianOil operates the largest and the widest network of petrol & diesel stations in

the country, numbering over 17,600.

It supplies Indane cooking gas to the doorsteps of over 50 million households in

nearly 2,700 markets through a network of about 5,000 Indane distributors.

Indian Oil's ISO-9002 certified Aviation Service commands over 62% market share

in aviation fuel business, meeting the fuel needs of domestic and international flag

carriers, private airlines and the Indian Defence Services. The Corporation also

enjoys a dominant share of the bulk consumer business, including that of railways,

state transport undertakings, and industrial, agricultural and marine sectors.

Customer are always the first

At IndianOil, customers always get the first priority. New initiatives are launched

round-the-year for the convenience of the various customer segments.

Exclusive XTRACARE petrol & diesel stations unveiled in select urban and semi-

urban markets offer a range of value-added services to enhance customer delight

and loyalty. Large format Swagat brand outlets cater to highway motorists, with

multiple facilities such as food courts, first aid, rest rooms and dormitories, spare

parts shops, etc. Specially formatted Kisan Seva Kendra outlets meet the diverse

13 | P a g e

needs of the rural populace, offering a variety of products and services such as

seeds, fertilizers, pesticides, farm equipment, medicines, spare parts for trucks and

tractors, tractor engine oils and pump set oils, besides auto fuels and kerosene.

SERVO Xpress has been launched recently as a one-

stop shop for auto care services.

To safeguard the interest of the valuable customers, interventions like retail

automation, vehicle tracking and marker systems have been introduced to ensure

quality and quantity of petroleum products.

AssamOil Division – A Profile

A remote place in the extreme Northeast of the country etched out a place for itself

in the industrial history of India over a century ago. This little town, Digboi, is the

headquarters of the AssamOil Division of the Indian Oil Corporation Ltd. and is

called the birthplace of country’s petroleum industry. It was in this region that the

pioneers struck oil in the midst of dense jungles at a time when there was hardly

and industrial development in the country. The Digboi Refinery, commissioned in

1901, is today India’s oldest operating refinery and one of the oldest operating

refineries in the world. In fact, it was the only refinery in India till the mid 1950.

Earlier it was owned and operated by the Assam Oil Company Limited. It came into

the fold of the IndianOil Corporation Ltd. By an act of the Parliament on 14 th

October 1981 and became Assam Oil Division of Indian Oil Ltd.

Today, with its vastly modernized operations and facilities, Digboi Refinery is an

ISO 9002 - ISO 14001 and DNV OHSMS 1997 accredited refinery manufacturing

major petroleum products and a wide range of specialty products. Digboi refinery

also meets the requirements of BS 8800.

Marketing - Where the customer always comes first

14 | P a g e

Marketing of petroleum products was started as early as in 1902 by Assam Oil,

when Kerosene from Digboi Refinery moved into the market, making it the

pioneering petroleum marketing company of India.

Assam Oil has been providing service to the nation by meeting the requirements of

the Defence Sector since a long time. In fact, Assam Oil is the first to supply LPG to

the Army Cookhouses, thereby contributing to the important cause of conservation

of forests, by substituting LPG for firewood, which was earlier used for cooking

purpose.

Assam Oil has a rich tradition of serving its customers and ensuring customer

satisfaction in terms of quality and quantity Assam Oil Division hopes to keep up

its reputation of good customer service and uphold its tradition of ensuring that the

customer always comes first.

15 | P a g e

Product Profile (Major Brands of IOCL)

16 | P a g e

17 | P a g e

AutoGas

AutoGas from IndianOil is India's leading

Auto LPG fuel brand available in about 60

cities. Auto LPG is a clean, high-octane and

eco-friendly fuel. It is obtained from natural

gas through fractionation and from crude oil

through refining. It is a mixture of

petroleum gases like propane and butane.

Liquefied Petroleum Gas(LPG)

Indane is today one of the largest packed-

LPG brands in the world. IndianOil

pioneered the launch of LPG in India in the

1970s and transformed the lives of millions

of people with the introduction of the clean,

efficient and safe cooking fuel. LPG also

led to a substantial improvement in the

health of women in rural areas by replacing

smoky and unhealthy chullahs with Indane.

It is today a fuel synonymous with safety,

reliability and convenience.

Premium Fuels

The launch of premium fuels –

Xtrapremium and Xtramile marked a new

beginning for IndianOil and its customers.

The maiden launch of these brands of fuel

IndianOil Aviation Service is a leading aviation fuel solution provider in India and

the most-preferred supplier of jet fuel to major international and domestic airlines.

Between one sunrise and the next, IndianOil Aviation Service refuels over 1500

flights – from the bustling metros to the remote airports linking the vast Indian

landscape, from the icy heights of Leh (the highest airport in the world at 10,682 ft)

to the distant islands of Andaman & Nicobar.

18 | P a g e

Project

Documents

Transcript of Project