Market Trends of India Liquified Petroleum Gas (LPG) Industry
This section covers the major market trends shaping the India Liquified Petroleum Gas (LPG) Market according to our research experts:
LPG Extracted From Natural Gas is Expected to Have Considerable Growth Rate
- The LPG extracted from natural gas is expected to witness significant growth during the forecast period. The Indian government is more focused on using natural gas and has an ambitious target to achieve 15% of the natural gas share in the energy mix by 2030 from 6.7% in 2021. This is anticipated to increase the efforts in LPG production from natural gas in the coming years.
- Natural gas contains a mixture of gases and liquids (propane and butane) extracted to produce LPG. In India, the natural gas consumption trends have increased significantly over the past several years. In FY2021-22, India's total natural gas consumption has risen to about 65037 Million Standard Cubic meters (MMSCM) from 60815 MMSCM in 2020-21. Such trends are anticipated to continue and positively impact the LPG market in India.
- Further, the LPG produced from the natural gas need not require any oil refinery; it just needs a gas separation facility that can extract the necessary gases to form the LPG. Hence, LPG extraction from natural gas is less expensive than LPG production from crude oil in refineries. The LPG extracted can be distributed through tankers or pipelines.
- Therefore, based on the above-mentioned factors, the LPG extracted from natural gas is expected to have a considerable growth rate in the Indian LPG market during the forecast period.
Understand The Key Trends Shaping This Market
Download PDF
Increasing LPG Demand and Supporting Government Initiatives to Drive the Market
- The LPG demand in India has been increasing considerably in India. In FY2020-21, the LPG consumption in India has reached 27.6 Million Metric Tonnes witnessing an increase of 5% compared to the FY2019-20. This trend is expected to continue and rise significantly during the forecast period, mainly due to the supporting government initiatives in the country.
- As of April 2022, the total number of active LPG domestic customers in India has reached about 30.5 crores from 14.9 crore customers in 2015. This is a massive rise in the domestic LPG customers in the country. Likewise, the number of LPG distributors in India rose to 25269 in April 2022 from just around 9686 in 2010 and 15930 in 2015.
- Further, the LPG bottling plants have been increasing in India's past few years. According to the Petroleum and Planning & Analysis Cell (PPAC), in 2021, the LPG bottling plants reached a total of 202, with a steady rise in demand for LPG in the country. These developments have made India achieve the LPG coverage of 99.8% in 2021 from around 56.2% in 2015. A similar scenario is expected to continue during the forecast period.
- The growing demand for clean cooking fuels in rural and urban households is expected to boost the country's LPG market in the coming years. Moreover, the supportive government initiatives in the form of initiatives such as the Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries scheme to make clean cooking fuel such as LPG available to the rural and deprived households are expected to remain the major driving factor in fueling the LPG market growth in India.
- Hence, the increasing demand for LPG supported by government initiatives is expected to drive the market and is likely to see significant development during the forecast period.
