Monday, March 24, 2008 Propelling the auto LPG business By Gigie A. Agtay
A FEW people know that one of the men behind the First Auto-LPG Gas Holdings is an Ateneo de Davao University (AdDU) alumnus.
Cebu-born Hector C. Almario, president of the Visayan Island Auto Gas Refuellers Association (Viagra), spent three years of his high school at AdDU from 1972-75.
Hoping to pursue medical school, "King" as he is fondly called, went to UP Diliman in college where he earned a BS in Psychology degree.
"After college, I left for the US because there was no opportunity here," King said.
He came back after several years and ventured into several businesses -- managed a restobar up in the mountains of Cebu and went into trading.
In 1992, he opened the first MCDonalds store in Cebu after graduating from the Hamburger University in Chicago, USA.
His interest in auto liquefied petroleum gas (LPG) was not a surprise because of his relationship with petroleum. He had four Shell retailer stations in 1994.
"I thought about going into this autogas retailing already. Not all the people know about auto LPG," King said. "Being a poor country we need it most. In Italy they have been using it for the past 40 years."
"For several years auto LPG was being used. Cebu was a test project, a pilot for these big oil companies. On a private garage but not for the public because it would mean added expenses and it would cannibalize their sales," he said.
"There was no incentive for them to do it so somebody had to do it for them. My partners and I deemed the urgency for a cheaper alternative."
Autogas is the term generally used for LPG, when it is used for the propulsion of road vehicles. It is obtained as a by-product of the distillation of oil from crude oil. Chemically it is a name given to a mixture of Propane and Butane.
Physically, it is a gas at room temperature and compresses into a liquid at reasonable temperatures and pressures and hence the name Liquefied Petroleum Gas. It is in this form that it is pumped into the car tank.
"It is produced in large quantities in India and the world over, a surplus of approximately 4 million tones per annum is currently available from the North Sea. This surplus is forecast to increase over the next 20 years," King said.
He said LPG is environment friendly. Since Autogas or LPG burns better, there is less pollutant particles emitted to the air. It is now used in 40 countries like US, Canada, Finland, China, Russia, India, Australia, Italy, France, Algeria, germany, Sweden and Iran.
In 2005, First Autogas was launched to provide a cleaner, inexpensive fuel alternative to all gasoline-consuming motorists. It is a public autogas re-fuelling network for the Visayas and Mindanao.
First Autogas partnered with Petronas Energy Philippines, Inc. (a subsidiary of Petronas, the national oil company of Malaysia) to provide a stable and abundant supply of LPG at the highest quality and at extremely competitive prices.
The First Autogas station, which was opened in Cebu City in July 2006, was successful right away.
Now, First Autogas has a total of 12 outlets in Cebu, Davao City, Valencia, Malaybalay and Cagayan de Oro City.
"We're going to finish the middle of the year by 15 outlets. Davao will have its 5th outlet along R. Castillo," King added.
In Cebu City, King said 85 percent of taxi units are using auto LPG. "Taxi fleet is the biggest market. In India in 1998, only 5O,000 cars use auto LPG, now its more than a million."
The auto LPG business is encouraging in Cebu, King said. "It may be slow in other areas but we know we are directing on the target market."
"We are multi-fuel, meaning we are a gasoline station, not only auto LPG, to give consumers a choice," he said.
"We hope to be a pricing leader in Cebu. For as long as we are not part of the cartel, we can make the price go down tomorrow. I don't like to go into a cartel where there's no more competition."
Auto LPG costs P29 per liter and King is glad that the price of LPG conversion kit has decreased by 50 percent.
"I made the kit price go down. Before I came into the market the kit was selling for more than P32,000, now its P14,000."
King, however, laments that there has been no effort on the government to help push the autogas as an alternative energy aside from CMG, ethanol, etc.
"I have to go out of the country to do my homework, do research and get outside help," King said. "But soon the First Auto-LPG Gas Holdings will be a major player in the alternative energy business."
