Shell eyeing entry into autogas retailing

With demand for liquefied petroleum gas as an automotive fuel steadily rising, Pilipinas Shell Petroleum Corp., a member of the Royal Dutch Group, said it is now studying the possibility of offering its own autogas brand. Shell LPG general manager Bernardo Ong, in a press conference to launch the 1st Philippine Autogas Summit, said they are currently undertaking a study which aims to determine the feasibility of entering the retail business for autogas. Shell currently serves as a wholesale supplier to some retailers of autogas such as Manila Auto Gas, Clean Fuel and Macro Gas. “For Shell, we have to determine whether there is more value for the consumer to make it part of a regular Shell branded offer. We study options all the time. Shell likes to be part of market development. We hope to finish the study within 2007, and at least have some ideas what is our way forward," he said. Ong said the firm would want to know if going into the retail of autogas would give it significant returns. The Shell official said they want to carefully study strategies which would give the firm an edge in the rapidly expanding autogas industry. “We're still studying exactly how we will approach the market. As we have succeeded in pioneering and developing the market and growing into market leadership without using our own Shell branded locations yet. The success is there and can we be even more successful," he said. With no investment figure as yet, Ong said an autogas retailer normally invests more than P5 million for autogas refilling facilities. Cornering 30 percent of the autogas market today, Shell, at present, allocates some 10 percent of its entire LPG business for the wholesaling of autogas to local refillers. “Autogas has even grown 25 times in the past two years. Of course, that was the take-off year. It will subsequently slow down but will remain at a double-digit growth rate or a minimum of 10-percent annually and much faster than the more mature LPG application," he said. “When you look at the whole LPG category in 2004 and 2005 of the DOE, the category actually shrunk or declined owing to high international contract prices. Against that backdrop the segment of autogas has grown quite well and is projected to grow faster than the rest of the LPG industry. We also want to assure the public that we can supply all the different needs adequately," he added. Autogas is one of the alternative fuels promoted by the government, in line with its Clean Air Act. The autogas product also sells an average of more than P20 below gasoline's retail price.-GMANews.TV