Liquefied Petroleum Gas (LPG) is a portable, clean, and energy-efficient source readily available to consumers worldwide. LPG is primarily obtained from natural gas liquids and through refineries by processing crude oil.
Growing demand for LPG from emerging countries is expected to drive the market during the forecast period. Urbanization, along with industrialization, has increased significantly across the world over the past few years. The flow of investments has changed from developed countries toward emerging countries due to the low labor and infrastructure costs.
Demand for LPG rose by over 6% in Asia in 2019, owing to significant growth in China, India, and Bangladesh. The majority of the increase was due to the growing reach of LPG to the rural population in these countries.
Moreover, the demand from other applications such as transportation is also increasing; for instance, Autogas consumption in the United States increased by 20% during 2020, while Marine LPG has dramatically taken off in 2020 fostered by the IMO 2020 mandate, which limits the sulfur cap to 1.5% in marine vessels effective from 1st January 2020. However, the lack of access to clean cooking remains acute in Africa, with access increasing only slightly from 15% in 2015 to 17% in 2018. Since 2015, just 25 million people have gained access to LPG in the region. In contrast, the population without access to clean cooking fuel increased to around 910 million in 2018 as population growth outpaced provision efforts.
LPG has emerged as one of the key fuel sources in the commercial and residential segments for heating and cooking applications substituting the conventional fuel sources, such as wood and coal.
The growing demand for LPG can attributed to the benefits such as easy accessibility, non-toxic, clean, convenient, portable, and cost-efficient compared to other fuels, such as wood and coal. The population surge across regions like Africa, Asia-Pacific, and Central and South America is projected to fuel up the demand during the projected timeframe as the residents in the subsequent regions use LPG as cooking fuel. For instance, in India, as of 2020, over 60%-75% of household works is done by using liquefied petroleum gas, i.e., for heating and cooking.