LPG Market Size, Share, Trends & Growth Opportunity [2031]

Report Description

The global LPG market size was USD 115 billion in 2022 and is likely to reach USD 158 billion by 2031, expanding at a CAGR of 3.6% during 2023–2031. The market growth is attributed to the growing participation of private and government organizations in the production of LPG.

The growth of the global LPG market is attributed to its increasing demand among different industries and domestic purposes. Many consumers and end-users across the world depend on LPG (liquified petroleum gas) for various reasons. Moreover, it is a pocket-friendly source of energy source used for cooking, air conditioning, transportation, and heating, which are the basic activities in a conventional household.

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People in numerous developing nations use LPG for several beneficial reasons. This increases the demand and consumption of LPG, which further propels the market during the forecast period. For instance,

• According to a report published by the Petroleum Planning & Analysis Cell (PPAC), on March 1, 2023, there were around 31.4 crore LPG connections in India, used for residential and commercial cooking purposes. This implies that the growing adoption of LPG in developing countries is anticipated to fuel the global market in the coming years.

The market report states that the COVID-19 pandemic moderately affected the global LPG market, as it caused a temporary shutdown of operations including manufacturing and processing. This further reduced the demand and supply coordination, which eventually affected the market’s growth. However, as LPG is a huge necessity among various end-users including industries and domestic consumers, the post-pandemic surge in the demand helped the market generate considerable revenue.

Impact of Artificial Intelligence on LPG Market

Increasing popularity of artificial intelligence (AI) and its adoption in the LPG market is expected to propel the market during the assessment period. It is been used as a predictive analysis in detecting leakage during the transportation and storage of LPG cylinders and storage trucks. This supports computer-based fluid dynamics technology and helps manage disaster and prevent industrial accidents.

Many market players are partnering with technology-based companies to integrate AI into their operations, which is further expected to aid the market's growth. For instance,

• On April 13, 2021, Bharat Petroleum Corporation Limited (BPCL) and Accenture collaborated in order to leverage Accenture’s capabilities such as AI, data, and cloud technologies to design a platform called IRIS. This platform is introduced to integrate all the real-time data of BPCL and its operations and offer a consolidated view of the obtained data.

LPG Market Dynamics

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Major Drivers

LPG is environmentally safe, as most of the energy it produces is only heat and not harmful gases and smoke, thus it is mainly preferred by many people, which directly boosts the market. Additionally, implementing strict regulations by governments of various countries against environmental pollution is expected to drive the global market. Governments are focusing on initiatives for providing LPG to people for use in residential purposes.

LPG can be easily bottled, stored, transported, and used in a wide range of applications, and is a cost-effective source of energy. Thus, the high demand and consumption rates among people across the world are further driving the market.

Existing Restraints

Irregular domestic supply of LPG is expected to restrain the market, as it causes inconvenience to consumers. Additionally, the high cost related to the liquefaction process and equipment requirement for the process, which is further anticipated to hamper the market, as it may affect the supply chain of the market. Furthermore, LPGs are highly flammable if not handled safely, which in turn, restraints the market.

Emerging Opportunities

Increasing adoption of auto-gas vehicles over conventional diesel and gasoline vehicles is anticipated to generate revenue generation opportunities in the market. This growing adoption is due to the rising consumer interest in green and cleaner fuels, as it helps in maintaining the lifespan of the vehicles.

Surging urbanization and infrastructure expansion is projected to create lucrative opportunities in the market. Several developing nations have a high demand for energy resources, which further helps in market expansion.

Scope of LPG Market Report

The report includes an assessment of trends, segments, and regional markets. Overview and dynamics have also been included in the report.

LPG Market Segment Insights

Source Segment Analysis

Based on source, the LPG market is trifurcated into associated gas, non-associated gas, and refinery. The non-associated gas segment is expected to expand at a rapid pace during the projection period, due to the increasing extortion of LPG from natural gas wells. Additionally, rising demand for LPG from a large number of industrial and residential consumers is further fueling the segment.

The refinery segment is anticipated to account for a significant market share during the forecast period, as they are one of the main sources of global gas production. Increasing number of countries such as Saudi Arabia, India, China, and Brazil are implementing refineries to increase refining capacity and cope with supply demand. In this way, the segment is anticipated to contribute to a considerable revenue generation for the market. For instance,

• As per the WORLD LPG ASSOCIATION, 40% of the global LPG is sourced through refining crude oil.

Application Segment Analysis

On the basis of application, the global market is segregated into commercial, residential, agriculture, transportation, and others. The residential segment is projected to register a considerable CAGR during the forecast period, due to rising residential LPG uses such as cooking, power generation, and water & space heating. In addition, as LPG is energy-efficient, eco-friendly, and cost-friendly it is popularly used for residential purposes, which further propels the segment.

The transportation segment accounts for a significant market share, due to the increasing demand for alternate fuels, other than petrol and diesel. This is due to rising environmental concerns and pollution issues. Additionally, LPG is one of the cost-effective fuel sources for transportation, is a good fuel option among several people across the world, thus these factors propel the segment.

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Regional Outlook

In terms of region, the global LPG market is classified as, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the forecast period, owing to surging population that results in the high LPG consumption for various purposes. Moreover, countries in the region have an ample amount of resource availability and energy necessities. Addition, increasing research and innovations in the petrochemical industry in China, India, and South Korea are further projected to fuel the regional market. For instance,

• According to a report published by the US Energy Information Administration, the LPG consumption in 2021 in China was around 2258 thousand barrels per day, and that of India was over 886 thousand barrels each day. With this rate, the countries stood first and third respectively, in the global rank of countries consuming LPG.

The market in Europe is anticipated to expand at a rapid pace during the forecast period, due to the presence of the key market players in the region. Additionally, the presence of a large consumer base in the countries of the region that use LPG for different applications such as agriculture, construction, residential, and transportation is further expected to boost the market in the region.

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