Confidence Petroleum India Ltd Management Discussions

GLOBAL ECONOMY

The global economy in FY 2024-25 navigated a phase of restrained momentum, shaped by persistent geopolitical uncertainties, trade realignments, and structural challenges. Global GDP growth was estimated between 2.3% and 3.0%, with the IMF revising its forecast to 3.0% on the back of a weaker U.S. dollar and an easing in effective tariffs, while the World Bank projected a slower expansion at 2.3%, highlighting the fragility of recovery outside recessionary years. Growth in advanced economies remained muted, weighed down by high debt burdens, tighter financial conditions, and soft investment activity. Inflationary pressures showed signs of moderation compared to earlier years, but uneven monetary responses across economies kept financial markets volatile.

In contrast, emerging markets and developing economies provided a relatively brighter outlook, expanding by nearly 3.8%. South Asia continued to be the global growth leader, with India standing at the forefront. Indias economy is projected to grow at around 6.3% in FY 2025-26, supported by resilient domestic demand, infrastructure investment, and expanding industrial capacity, while the broader South Asian region is expected to sustain growth above 5.8%. Sub-Saharan Africa also showed signs of steady improvement, advancing to 3.7% in 2025, driven by rising resource demand and investment flows. The Middle East and North Africa region is projected to expand by 2.7%, with potential acceleration as energy investments pick up, whereas Latin America and the Caribbean are expected to remain subdued at around 2.3%, constrained by structural weaknesses and policy uncertainties.

Despite these regional variations, the global economy continues to grapple with critical risks. Trade protectionism, fragmented supply chains, and growing fiscal vulnerabilities are reshaping the contours of global commerce. The slowdown in poverty reduction and living standards in many developing economies has become a pressing concern, threatening long-term social and economic stability. Additionally, rising public debt, heightened geopolitical tensions, and the trend toward deglobalization remain structural challenges for policymakers and businesses alike. On the other hand, opportunities are emerging from the rapid pace of digital adoption, energy transition investments, and strengthening intra-regional trade partnerships, which could provide new levers for sustainable growth in the medium term.

GLOBAL ENERGY SECTOR

The global energy sector in FY 2024-25 was marked by a phase of accelerated transition, with demand continuing to expand while the composition of the supply mix underwent significant structural changes. Total global energy demand grew by around 2.2%, driven largely by a surge in electricity consumption of nearly 4%, the highest in recent years. This rise was attributed to industrial expansion, digitalisation and artificial intelligence (AI) adoption, as well as extreme weather conditions that intensified energy needs for cooling and heating. Low-carbon sources such as renewables and nuclear power were at the forefront of this growth, accounting for close to 80% of incremental electricity generation. Solar power emerged as the dominant force, adding a record 700 GW of new capacity in 2024 alone, while wind power also registered strong gains.

China remained the global leader, contributing more than half of the new solar and wind capacity additions, underlining its strategic dominance in renewable energy deployment. By the end of the year, renewable capacity worldwide had reached 4,443 GW, representing nearly 40% of total installed electricity capacity.

Despite these advances, fossil fuels continued to play a central role, underscoring the dual nature of the energy transition. Coal demand edged higher by around 1%, oil consumption grew by close to 0.8%, and natural gas rebounded strongly with growth of about 2.5%, largely due to its role as a transitional fuel balancing variable renewable power generation. Together, fossil fuels still accounted for nearly 60% of global primary energy demand, reflecting both the resilience of hydrocarbons and the challenge of rapidly decarbonising the global energy system. However, early signs of moderation are emerging: for the first time since the pandemic, global investment in oil and gas is projected to decline by around 6% in 2025, influenced by price volatility, policy uncertainties, and shifting investor sentiment.

The investment landscape highlighted the widening gap between fossil fuels and clean energy. Global energy investments are expected to touch USD 3.3 trillion in 2025, with over two-thirds—around USD 2.2 trillion—directed towards renewables, nuclear power, electricity grids, storage solutions, and efficiency improvements. This is more than double the USD 1.1 trillion allocated to oil, gas, and coal, reflecting the growing confidence of policymakers and investors in the long-term viability of low-carbon solutions. Importantly, renewables and nuclear energy now contribute over 40% of the global electricity mix—the highest share since the 1940s—demonstrating that the clean energy transition is no longer a peripheral shift but a mainstream driver of global energy policy and economics.

Overall, FY 2024-25 reinforced the dual reality of the global energy sector: hydrocarbons continue to underpin global energy security and supply stability, while the momentum towards renewable energy and decarbonisation accelerates at an unprecedented pace. The sector is entering a phase where investment flows, technological innovation, and policy frameworks are increasingly aligned towards sustainability, even as the world remains dependent on fossil fuels to meet its immediate energy needs.

LPG INDUSTRY

In the financial year 2024-25, Indias LPG industry witnessed steady expansion, consolidating its position as one of the worlds largest LPG markets. Domestic LPG consumption during April-December 2024 touched nearly 23.1 million metric tonnes (MMT), reflecting a 6% year-on-year growth, with household usage continuing to dominate at close to 89% of total demand. The active customer base crossed 32.7 crore consumers, supported by the Pradhan Mantri Ujjwala Yojana (PMUY), which continues to drive social inclusivity by providing clean cooking fuel access to economically weaker sections.

Despite strong demand, the industry remains highly import-dependent, with approximately 67% of national requirements met through overseas supplies, largely sourced from the Gulf. Recognizing the risks of concentration, India initiated diversification by commencing LPG imports from the United States in 2025, with plans to source around 10% of its LPG imports from the U.S. by 2026.

Financially, the sector continued to grapple with rising subsidy burdens and under-recoveries, with combined losses for PSU OMCs estimated at ^39,000 crore during FY 2024-25. To alleviate this strain and ensure uninterrupted affordability for consumers, particularly under PMUY, the Government of

India sanctioned a ^30,000 crore compensation package for the OMCs. This intervention highlights the critical role of subsidies in balancing energy affordability and financial viability.

On the infrastructure front, the LPG ecosystem expanded steadily, with approximately 210 bottling plants in operation across the country and cumulative storage tankage of nearly 1.3 million tonnes, equivalent to about 16 days of national consumption. Strategic projects such as the Kandla-Gorakhpur LPG Pipeline, designed to handle 3.75 MMT annually, and the commissioning of HPCLs 5 MMTPA Chhara LNG terminal in Gujarat, further strengthened Indias supply chain and distribution resilience.

Looking ahead, LPG demand is expected to moderate, with growth projected at around 2% in 2025 before recovering to 4.5% in 2026, reflecting saturation in urban household segments and rising competition from piped natural gas (PNG) networks in metros and developed states. However, the longterm outlook remains positive, underpinned by sustained government support, expanding rural consumption, and rising industrial and petrochemical demand, particularly from new propane dehydrogenation (PDH) capacities. Strategic import diversification and infrastructure augmentation will remain the key drivers of resilience and growth for the industry in the coming years.

The global LPG market remains sizable and steadily expanding, with a market value of approximately USD 144.8 billion in 2024, and projected to reach USD 197.3 billion by 2033, at a CAGR of ~3.3% over 2025-2033.

1. LPG BULK MARKETING

In May 2022, Confidence Petroleum India Limited (CPIL) undertook a major strategic shift by commencing direct LPG imports from overseas markets, particularly the Middle East. Moving away from its earlier practice of sourcing through traders, the company has recently established direct refinery tie- ups, ensuring access to reliable volumes at more competitive prices. To further strengthen its procurement framework, CPIL has deployed two time-chartered vessels, providing long-term shipping security and greater control over its import logistics.

This backward integration has enabled CPIL to create a robust and self-reliant LPG supply framework, ensuring consistency and stability in meeting rising domestic demand. The success of this model is attributed to the companys ability to establish long-term relationships with global suppliers and to implement its import strategy with speed and precision, even amidst global market volatility.

To complement its import operations, CPIL has made substantial investments in logistics and storage infrastructure, including the addition of a large fleet of LPG road tankers and the establishment of enhanced storage capacities across multiple strategic locations. In parallel, the company has secured temporary port-based storage facilities, providing the agility to manage supply fluctuations and ensuring an uninterrupted flow of LPG to its Auto LPG and Packed LPG businesses.

Building on this strengthened supply chain, CPIL has successfully diversified into the Bulk LPG supply segment, catering to industrial consumers across varied sectors. Within a short span, this business has demonstrated strong volume growth, further reinforcing CPILs ability to unlock new revenue streams and capitalize on the evolving LPG demand landscape.

OUTLOOK

Looking ahead, CPIL is committed to broadening its presence in untapped industrial markets and promoting the transition towards clean, sustainable fuel alternatives. The company will continue to strengthen its supply chain resilience through direct refinery imports, long-term shipping arrangements, and advanced logistics solutions. These initiatives are expected to drive sustainable growth, enhance profitability, and further consolidate CPILs position as a leading integrated LPG solutions provider in Indias industrial energy space.

2. AUTO LPG SEGMENT

Confidence Petroleum India Limited (CPIL) has reinforced its leadership in the Auto LPG sector under its flagship brand ‘GoGas. As of August 2025, the company has operationalized 295 Auto LPG Dispensing Stations (ALDS) strategically spread across India, ensuring enhanced accessibility and convenience for consumers. A key milestone was CPILs emergence as the largest and fastest-growing private operator in the Auto LPG segment across the nation.

All ALDS operated by CPIL are fully licensed and compliant with Petroleum and Explosives Safety Organization (PESO) standards, reflecting the companys strong commitment to safety, quality, and regulatory adherence. The company has diligently obtained all mandatory approvals, including NOCs, Explosive Licenses, and Trade Licenses.

Auto LPG offers significant cost advantages in daily operations and plays a vital role in reducing vehicular emissions, thereby supporting Indias environmental goals. These benefits have positioned Auto LPG as an increasingly attractive option for both individual users and commercial fleet operators.

From an investment standpoint, Auto LPG stations are highly cost-efficient, requiring lower capital expenditure compared to conventional fuel outlets and offering a payback period of less than 18 months. Additionally, the stable availability of LPG ensures supply reliability, making Auto LPG a sustainable and viable alternative fuel.

In line with its growth vision, CPIL is on track to expand its network in ALDS in the near future, catering to the growing demand for clean and cost-effective fuels. The company is also exploring initiatives to promote LPG kit retrofitting, encouraging wider adoption among vehicle owners. By enabling affordable conversion from petrol and diesel to LPG, CPIL aims to accelerate market penetration while supporting the broader clean energy transition.

OUTLOOK

The outlook for Auto LPG in India remains promising, particularly given government initiatives promoting alternative fuels as part of the countrys energy security and sustainability agenda. While emerging technologies such as electric vehicles (EVs) and green hydrogen will shape the long-term energy mix, Auto LPG is expected to retain strong relevance in the medium term, especially in regions where EV infrastructure development is still in progress.

CPILs emphasis on network expansion, customer engagement, and innovative solutions—backed by its unwavering commitment to compliance, safety, and sustainability—positions the company strongly to capitalize on these opportunities. By addressing both consumer demand and environmental priorities, CPIL is well-placed to reinforce its leadership in the Auto LPG sector and contribute meaningfully to Indias clean energy journey.

2. LPG RETAIL SEGMENT / PACKED LPG SEGMENT

Confidence Petroleum India Limited, under its flagship brand GoGas, has emerged as a prominent force in the Packed LPG segment with one of the most versatile product portfolios in the industry. The company offers cylinders in multiple capacities—from compact 2 kg units to large 425 kg cylinders— ensuring that energy requirements of households, commercial establishments, and industries are comprehensively addressed. By also extending customized bulk LPG solutions to industrial clients, CPIL demonstrates its ability to adapt to both routine and complex fuel demands.

A key achievement during the year was the increasing adoption of GoGas cylinders by industrial customers. Tailored to meet the energy requirements of large-scale operations, these offerings have been recognized for enhancing efficiency, reducing interruptions, and supporting uninterrupted productivity, making CPIL a trusted partner for industrial energy needs.

To elevate customer engagement and service delivery, CPIL expanded its Direct-to-Customer (D2C) initiative. While this model was initially launched for the rapidly growing HoReCa (Hotels, Restaurants, and Cafeterias) sector, it has now been broadened to serve large institutional HoReCa customers as well as industrial consumers. By directly supplying energy to these segments, the company ensures consistency, reliability, and a service experience tailored to their unique needs.

On the inclusivity front, CPIL introduced rural schemes for Taluka-level penetration through small cylinders under the ‘Janta Cylinder Yojna (JCY), thereby offering low-cost and accessible LPG solutions to rural households and small businesses. Additionally, the company started stock points in targeted areas and acquired PESO-approved godowns to expand its geographical reach and capture incremental growth opportunities from new regions.

The company has also strengthened its operations through the implementation of advanced software solutions such as Salesforce, Lystloc, and Runo, which have streamlined processes, enhanced productivity, and instilled a more disciplined, measurable working environment. Furthermore, CPIL increased its FOR fleet capacity, enabling deeper dealer penetration, wider geographical coverage, and improved service delivery across markets.

An industry-first customer loyalty initiative—‘Gin ke Lo, Gin ke Do—was also launched, wherein customers pay only for the gas consumed. This innovation reinforces trust, builds stronger customer relationships, and demonstrates CPILs commitment to delivering true value.

The companys distribution strength has scaled up significantly, now supported by a dealer network of over 2,500 partners. This extensive footprint enhances availability, strengthens brand presence, and ensures prompt service across urban, semi-urban, and rural regions alike.

OUTLOOK

Indias packed LPG sector is poised for sustained growth, supported by rising demand for non- subsidized LPG across households, industries, and the hospitality segment, along with government policies encouraging clean fuel adoption. CPIL intends to harness this momentum through a well- calibrated strategy aimed at deepening its penetration in rural markets while simultaneously consolidating its position in urban centers, thereby driving sustainable growth in market share across both segments.

Moving forward, the company will focus on building deeper penetration into rural and semi-urban markets, scaling its direct supply initiatives for institutional and industrial customers, and continuously innovating its product and service offerings. With a robust infrastructure comprising manufacturing plants, bottling facilities, logistics capabilities, and a vast distribution network, CPIL is well-prepared to meet evolving market requirements.

By combining operational excellence with customer-centric strategies, CPIL is confident of delivering sustained growth while creating lasting value for its stakeholders in the years ahead.

4. BOTTLING DIVISION

Confidence Petroleum India Limited (CPIL) operates one of the most comprehensive LPG bottling infrastructures in the country, with 68 plants strategically spread across multiple states. This extensive network positions CPIL as the largest private sector bottler of LPG in India. The plants form the backbone of the companys operations, enabling uninterrupted supply to a diverse customer base— ranging from individual households to commercial establishments, industries, and Auto LPG stations.

Beyond supporting its own branded ‘GoGas operations, CPILs facilities also play a critical role in servicing leading national oil companies, including HPCL, BPCL, and IOCL, as well as private energy majors such as Reliance. This dual engagement reflects CPILs significance within the wider national energy ecosystem and highlights its contribution to strengthening Indias LPG supply chain.

To address the growing demand and strengthen its supply chain capabilities, CPIL is progressively expanding its bottling network. The company is setting up new facilities in strategically chosen geographies, ensuring stronger market coverage and improved accessibility. This expansion goes beyond simply increasing capacity—it is a deliberate strategy to enhance logistics efficiency, widen market reach, and provide reliable support across all LPG segments, including Auto, Packed, and Bulk.

At the core of this initiative is the adoption of a hub-and-spoke distribution framework. By developing regional hubs, CPIL is able to streamline supply routes, reduce transportation costs, and accelerate delivery timelines, thereby ensuring superior service quality and greater customer satisfaction.

OUTLOOK

As CPIL intensifies its efforts to strengthen its retail presence and expand its bulk LPG operations, the bottling network will continue to serve as a vital pillar of the companys growth strategy. The ongoing expansion of its facilities marks a significant enhancement in operational capacity, positioning the company to stay well ahead of evolving market requirements.

With consistent investment in infrastructure, automation, and rigorous safety standards, CPILs bottling division is fully geared to address the increasing energy demands of a dynamic marketplace. This strategy reinforces the companys long-term commitment to providing reliable, efficient, and sustainable LPG solutions, while delivering lasting value to customers, business partners, and stakeholders.

5.CNG RETAILING DIVISION-

Confidence Petroleum India Limited (CPIL) has strategically diversified into the Compressed Natural Gas (CNG) retailing segment, recognizing its critical role in Indias clean energy transition and sustainable mobility push. Withincreasing government focus on expanding the City Gas Distribution (CGD) network and promoting alternative fuels, CNG has emerged as a preferred choice for both commercial and personal transport, offering an eco-friendly and cost-effective solution.

CPIL has established itself as a reliable partner in this evolving space through its Master Agreement with GAIL Gas India Limited for the development and operation of CNG stations in Bengaluru. 50 outlets are already operational, contributing to the citys green mobility ecosystem and catering to the needs of a rapidly expanding customer base.

Building on this foundation, CPIL is also actively exploring collaborations with other City Gas Distribution companies across the country. These partnerships will enable the company to extend its CNG retail network beyond Bengaluru, aligning with the Government of Indias vision to establish 10,000 CNG stations nationwide in the coming years.

The CNG retailing division is poised to become a significant contributor to CPILs growth trajectory. By leveraging its deep experience in fuel retailing, robust infrastructure capabilities, and strong brand reputation, the company is well-positioned to deliver sustainable returns from this business. The division also represents CPILs commitment to environmental stewardship by reducing carbon emissions and supporting the adoption of cleaner fuels.

OUTLOOK

With rising adoption of CNG vehicles and a supportive regulatory environment, CPIL anticipates steady and long-term growth in this segment. The companys focus remains on expanding its retail footprint, ensuring consistent availability, and offering best-in-class service standards. This division will play a vital role in CPILs journey toward becoming a diversified energy solutions provider while reinforcing its commitment to a cleaner, greener future.

5. LPG CYLINDER DIVISION

Confidence Petroleum India Limited (CPIL) has built a strong reputation as one of the largest private sector players in Indias LPG cylinder manufacturing industry. With modern, well-equipped facilities located across multiple states, the company has created a manufacturing network that not only supports its wide-ranging customer base but also strengthens its own integrated operations. Over the years, CPIL has established enduring partnerships with leading PSU oil companies—HPCL, BPCL, and IOCL. This sustained trust reflects the companys consistent focus on quality, reliability, and timely execution.

The division manufactures an extensive portfolio of LPG cylinders, addressing domestic, commercial, and industrial needs, while simultaneously meeting CPILs in-house requirements for its ‘GoGas brand. This dual focus enhances supply chain integration, ensuring uniformity in quality and operational efficiency across business segments.

The geographic spread of CPILs cylinder manufacturing units provides a critical competitive edge. By operating in close proximity to key customers and high-demand markets, the company achieves faster turnaround times, minimizes logistics costs, and ensures uninterrupted supply. This strategic positioning further enhances CPILs credibility as a dependable supplier within Indias LPG ecosystem.

The Government of Indias continued emphasis on expanding LPG access, particularly through schemes like Ujjwala 2.0, has created new avenues for industry growth. With scalable capacities and a proven ability to deliver at scale, CPIL is well-placed to capture these opportunities. The companys responsiveness to such national initiatives not only reinforces its market presence but also positions it as a contributor to Indias energy inclusion agenda.

With its unwavering commitment to quality and operational excellence, CPIL aims to sustain its leadership position in the LPG cylinder manufacturing segment, while creating long-term value for customers, partners, and stakeholders.

RISK AND THREATS: -

Confidence Petroleum India Limited operates in an environment shaped by global energy transitions, fluctuating market dynamics, and evolving regulations. These factors present both challenges and opportunities for the company.

One of the key risks lies in the volatility of international crude oil and gas prices, which are often influenced by geopolitical developments and supply chain disruptions. Such fluctuations can impact input costs and margins. To address this, CPIL actively explores long-term supply arrangements, diversifies sourcing channels, and leverages its own import infrastructure to reduce exposure to sudden price shocks.

Another structural challenge is the global shift toward renewable energy and the growing emphasis on decarbonisation. While LPG and CNG are relatively cleaner alternatives compared to other fossil fuels, the rise of electric vehicles (EVs), green hydrogen, and other sustainable technologies could gradually affect demand. CPIL mitigates this risk by investing in cleaner fuel infrastructure, such as CNG retailing, while also pursuing innovations in distribution and logistics that improve competitiveness.

Regulatory tightening, especially in the form of stricter environmental and safety norms, may increase compliance costs and operational demands. The company addresses this by maintaining strong governance practices, investing in modern technology, and adopting global best practices in safety and environmental management.

By closely monitoring market trends, investing in technology and infrastructure, and maintaining a diversified portfolio, CPIL remains confident in its ability to navigate these risks effectively and sustain long-term growth.

CORPORATE SOCIAL RESPONSIBILITY: -

At Confidence Petroleum India Limited, social responsibility is deeply embedded in our corporate ethos. We believe that business success must go hand in hand with creating a positive impact on society and the environment. In FY 2024-25, the company continued to advance this commitment through a series of meaningful CSR initiatives.

A key highlight of the year was a contribution of INR 1,76,50,000 to the Araya Foundation in Ahmedabad. This support enables the foundation to extend its outreach across education, healthcare, food distribution, and social welfare programs, aimed at uplifting underprivileged communities.

In addition, CPIL contributed INR 75,00,000 to the Government of Maharashtra at Ratnagiri to support welfare initiatives for people. This reflects our responsibility toward local communities impacted by industrial and infrastructural development.

On the environmental front, the company strengthened its green agenda through plantation drives across multiple locations. These initiatives are directed at enhancing biodiversity, increasing green cover, and contributing to long-term ecological balance while mitigating our carbon footprint.

Through these sustained efforts, CPIL reaffirms its role as a responsible corporate citizen—one that is committed not only to delivering energy solutions but also to enriching lives, supporting communities, and protecting the environment for generations to come.