Report Description

Asia-Pacific LPG Cylinder Market is expected to experience steady growth during the forecast period, 2024 to 2028. LPG cylinders serve as a highly efficient fuel source, finding wide-ranging applications in agriculture, recreation, hospitality, construction, sailing, and fishing. They are utilized for water heating, central heating, and cooking, offering an affordable and effective solution for heating off-grid residences. The market witnessed a decline in demand due to the pandemic, resulting in a low price of USD 236 per tonne in April 2020. However, the Russian-Ukrainian war caused a significant surge in prices, reaching USD 952 per tonne in April 2022. The GDP growth rate in East Asia and the Pacific region was 5.81% in 2021. This positive economic growth further fuels market expansion in the future.

The demand for LPG is on the rise in the industrial, residential, and power generation sectors, with the transportation sector showing the most promising growth potential. This upward trend is attributed to a growing public awareness regarding the benefits of using LPG as a replacement for traditional fossil fuels. Developed and emerging nations are increasingly adopting clean and sustainable energy sources, further driving the expansion of the LPG market. Technological advancements also contribute to this growth, alongside an increasing number of government initiatives aimed at educating rural communities about transitioning from LPG to conventional cooking fuels such as kerosene, wood, and coal. These factors are expected to play a crucial role in the industry's overall development.

Based on customs data, China's imports of LPG during the period of January to November 2022 witnessed an year-on-year increase of 7%, totaling 24.2 million metric tons. The primary source countries of these supplies were the United States, the United Arab Emirates, Oman, Qatar, and Saudi Arabia. Notably, these imports included a more cost-effective supply from Iran. Shipping sources indicate that Iranian shipments to China are projected to reach 8.3 million metric tons by the end of 2023, followed by the shipment of 6.82 million metric tons in 2022. These figures highlight China's position as the largest consumer of LPG. According to trade sources, China's LPG imports are expected to reach 26.3 million metric tons in 2022, surpassing the 24.5 million metric tons imported in 2021. Furthermore, it is projected that China's LPG imports are going to be increased by 21% by the end of 2023, reaching 31.8 million metric tons. This substantial demand from China contributes to the anticipated growth of the LPG market all across the Asia-Pacific region in the forecast period 2024-2028.

Rising Government Initiatives and Policies are Fueling the Market Growth

In recent years, coal has predominantly been utilized for electricity and energy generation in economically disadvantaged nations, often supplemented by natural gas as a backup source. However, emerging economies are actively seeking alternative options today. These alternatives encompass distributed generation methods like microgenerators, as well as renewable energy sources, which rely on improved storage capabilities and reduced intermittency in power generation. Government bodies and energy providers are now turning their attention to economically viable, environmentally friendly, and relatively uncomplicated alternative energy sources. Among these options, liquid petroleum gas (LPG) is highly utilized by industries.

The purchasing power of households plays a crucial role in influencing the demand for LPG cylinders. This impact is particularly pronounced among lower income group families, as they have access to cheaper alternative fuels such as kerosene and fuel wood, often at heavily subsidized rates. To stimulate greater LPG consumption, the government has implemented various initiatives. Notably, programs like PAHAL have been introduced with the objective of providing clean cooking gas connections to impoverished households that traditionally rely on cooking fuels like firewood, coal, and cow-dung. Since its launch, the scheme has successfully reached over 80 million Ujwala beneficiaries, resulting in an average per capita consumption of around 3 LPG refills per year. This transformative scheme has positively influenced the adoption of LPG cylinders among first-time users, bringing about a significant change in the lives of households that were previously reliant on traditional cooking fuels. Consequently, there has been a substantial increase in the demand for LPG cylinders from households.

Market players involved in the LPG cylinder industry have introduced smaller package sizes to cater to specific market demands. As part of the government's efforts to support economically disadvantaged families, a scheme such as Pradhan Mantri Ujjwala Yojana (PMUY) has been implemented that allows them to exchange their 14 kg LPG cylinder for a 5 kg cylinder. This scheme offers flexibility, enabling consumers to switch between the two-cylinder sizes as per their requirements. Additionally, consumers have been given the opportunity to avail themselves of a PMUY scheme where they can access two 5 kg cylinders. These initiatives have greatly enhanced affordability for a significant number of consumers residing in Tier 3 cities and rural areas. To further assist consumers, special subsidiary loans have been made available, with LPG marketers deferring the repayment period for one year or until the consumer has obtained six LPG refills, whichever comes first.