Global Liquefied Petroleum Gas Market by Source (Refinery, Associated Gas, and Non-Associated Gas), Application (Residential/Commercial, Chemical, Autogas, Industrial, Refinery, and Others), and Region (North America, Europe, Asia-Pacific, and LAMEA): Opportunity Analysis and Industry Forecast, 2023-2032

Liquefied Petroleum Gas Overview

Liquefied petroleum gas (LPG), which is made up of  propane and butane, is a flexible and frequently used fuel. It is produced by processing natural gas and refining crude oil. LPG is heavier than air, colourless, and odourless. It is given a characteristic odorant for safety reasons, which makes it possible to spot leakage.  In domestic, commercial, and industrial settings, it is frequently utilised as fuel for heating, cooking, and hot water systems. Additionally, LPG is frequently utilised in transportation, especially in conventional cars. LPG is also used as a feedstock for petrochemical production and as a propellant in aerosol goods.

Global Liquefied Petroleum Gas Market Analysis

The global liquefied petroleum gas market size was $119.1 billion in 2022 and is predicted to grow at a CAGR of 4.1%, by generating a revenue of $176.8 billion by 2032.

COVID-19 Impact on Global Liquefied Petroleum Gas Market

Throughout the epidemic, the demand on the LPG market fluctuated. LPG demand first increased as a result of individuals stocking up on necessities, such as LPG cylinders, during lockdowns and restrictions. Due to restaurant closures, the reliance on home cooking grew and there was a greater demand for stable fuel for heating and electricity generation. The demand for LPG from the commercial and industrial sectors fell, meanwhile, as economic activity was constrained, and businesses cut back on operations.

Energy demand, notably LPG demand, will increase as economies recover and commercial activities pick up in the post-pandemic period. The easing of limitations and the restarting of businesses, industries, and transportation sectors will increase the demand of LPG. The demand for bulk LPG supply will be driven by the revival of industries including hospitality, dining, and tourism.

Energy Demand and Accessibility to Drive the Market Growth

The liquified petroleum gas market is significantly being driven by the rising worldwide energy demand. In regions where LPG is widely used for cooking and heating, the residential sector is a significant driver of the LPG business. Since LPG burns cleanly, it is a preferred fuel for space heating, water heating, and cooking in households. The demand for LPG in the residential sector is influenced by elements like population increase, urbanisation, and rising disposable incomes. A key factor is LPG's price competitiveness when compared to other energy sources. LPG frequently provides a more affordable option, especially in areas where the cost of electricity or natural gas is comparatively greater. LPG's market is expanding as a result of its affordability and price stability, which draw consumers and businesses looking for reliable and inexpensive energy alternatives.

Infrastructure Limitations to Restrain Market Growth

The absence of a sufficient infrastructure is one of the major obstacles facing the LPG business. To guarantee end consumers have access to LPG, a robust distribution and storage infrastructure is necessary. Government policies and regulations may help or hinder the expansion of the LPG market. LPG market expansion may be hampered by policies that place limitations, greater taxes, or stricter controls on the fuel. Investment choices and the growth of an industry can also be impacted by uncertainty surrounding future policy directions and changing laws. In markets where prices are sensitive, users may be discouraged from switching to or maintaining their usage of LPG by sudden price changes.

LPG Autogas to Drive Excellent Opportunities

LPG as a fuel for transportation has a considerable growth potential. Comparing LPG AutoGas vehicles to traditional petrol and diesel automobiles, the latter release fewer pollutants. LPG AutoGas can aid in the move to sustainable mobility as people's awareness of air pollution and the demand for cleaner transportation grows. The creation of infrastructure for LPG refuelling stations, government incentives, and support can all help to accelerate the use of LPG as a transportation fuel. LPG can act as a transition fuel and an alternative to higher-emission choices as nations and industry concentrate on decarbonization, providing a growth opportunity for the market.

Global Liquefied Petroleum Gas Market Share, by Source, 2022

The non-associated Gas sub-segment accounted for the highest market size in 2022. The manufacturing of LPG can benefit from non-associated gas. Propane and butane, which may be separated from non-associated gas by processing and fractionation, make up the majority of LPG. High LPG content non-associated gas deposits is economically appealing for LPG production, offering a useful feedstock for the LPG market. Along with more conventional methods like the processing of natural gas and the refining of crude oil, it offers an additional source of LPG production. By minimising reliance on particular suppliers and enhancing the robustness of the supply chain, supply diversification contributes to the maintenance of a steady and reliable LPG market.

Global Liquefied Petroleum Gas Market Share, by Application, 2022

The chemical sub-segment accounted for the highest share in 2022. Using LPG as a valuable feedstock has advantages for the petrochemical industry. It serves as a raw ingredient for the production of numerous chemicals and petrochemical goods. LPG is a suitable substance for the synthesis of ethylene, propylene, butadiene, aromatics, and other essential petrochemical building blocks due to its nature, particularly its propane and butane components. LPG offers a conveniently accessible fuel for the synthesis of chemicals. It can be obtained from non-associated gas fields, crude oil refineries, and natural gas processing. The chemical sector benefits from the availability of LPG as a feedstock since it supports its manufacturing procedures and overall operations with a steady and continuous supply.

Global Liquefied Petroleum Gas Market Share, by Region, 2022

The Asia-Pacific liquified petroleum gas market accounted for the largest market share in 2022. The Asia Pacific region consumes the most LPG, globally. Due to the quick urbanisation, population growth, and rise in energy consumption in nations like China, India, Japan, South Korea, and Southeast Asia, there is a significant demand for LPG. LPG is widely utilised as a fuel for industrial processes, corporate and commercial operations, and automobiles. LPG presents a chance as a cleaner-burning fuel when compared to other fossil fuels because of the Asia Pacific region's focus on environmental sustainability and lowering air pollution.

Competitive Scenario in the Global Liquefied Petroleum Gas Market

Product development and geographic expansion are major players functioning in the highly competitive global liquefied petroleum gas market. To support the Permian Basin's ongoing production expansion, Enterprise Products Partners announced plans to expand its natural gas liquid (NGL) pipeline system there and construct two processing facilities in September 2022. The company plans to loop new pipelines and alter current pump stations in order to increase the infrastructure of its Shin Oak NGL pipeline. This initial extension's completion is anticipated in the first quarter of 2024, increasing capacity to 275,000 bpd.

Some of the leading liquefied petroleum gas market players are Chevron Corporation, Reliance Industries Limited, Royal Dutch Shell, Exxon Mobil Corporation, Qatargas Operating Company Limited, Total, Petrofac Limited, Petroliam Nasional Berhad (PETRONAS), PetroChina Company Limited, and Petredec Pte Limited