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.