Report Description

Forecast Period

2024-2028

Market Size (2022)

USD 156.25 Billion

CAGR (2023-2028)

5.23%

Fastest Growing Segment

Residential

Largest Market

Asia Pacific

 

Market Overview

Global LPG Cylinder Market was valued at USD 156.25 Billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 5.23% through 2028. The Global LPG Cylinder Market refers to the worldwide industry involved in the production, distribution, and utilization of LPG (liquefied petroleum gas) cylinders. LPG cylinders are pressurized containers used to store and transport liquefied petroleum gas, which is a flammable hydrocarbon gas mixture commonly used as a fuel for heating, cooking, and various industrial applications. The market encompasses the entire supply chain, from cylinder manufacturing and distribution to end-users such as households, commercial establishments, and industrial facilities. LPG is a versatile and energy-efficient source of fuel that is widely used as an alternative to traditional energy sources like electricity and natural gas. LPG cylinders provide a convenient way to store and transport LPG safely, making it accessible to a wide range of users in both urban and rural areas. The Global LPG Cylinder Market includes various types of cylinders designed for different applications and regions. These cylinders are typically made from materials such as steel, aluminum, or composite materials to withstand the pressure and characteristics of LPG. The market is characterized by a variety of cylinder sizes and capacities to cater to diverse customer needs, ranging from small household cylinders to large industrial cylinders.

Key Market Drivers

LPG cylinder is an effective fuel with a wide range of applications in the agricultural, recreational, hospitality, industrial, construction, sailing, and fishing industries. It can be used as fuel for water heating, central heating, and cooking, and it is a particularly affordable and effective way to heat off-grid dwellings. The yearly average price of LNG in Asian markets in 2022 was USD34 per million British thermal units (MMBtu), which is more than double the price in 2021.

The industrial, residential, and power generation sectors are all experiencing growing LPG demand, but the transportation sector has the greatest potential. Growing public awareness of the advantages of using LPG to replace fossil fuels and the increasing use of clean, green energy sources in developed and emerging nations are two factors that are likely to support the expansion of the LPG market. Additionally, technological factors along with the increasing number of government initiatives aimed at educating rural residents to switch from LPG to conventional cooking fuels like kerosene, wood, and coal are projected to play a critical part in the industry's development.

According to data, China's LPG imports from January to November 2022 increased by 7% year over year to 24.2 million mt, with supplies coming primarily from the US, the UAE, Oman, Qatar, and Saudi Arabia. The imports include a cheaper Iranian supply. Iranian shipments are anticipated to reach 8.3 million mt in 2023 after 6.82 million mt were shipped in 2022, mostly to China, according to shipping sources. According to trade sources, China will import 26.3 million mt of LPG in 2022, up from over 24.5 million mt in 2021, and 31.8 million mt in 2023, up 21% from the previous year. Hence, chine is the largest consumer of LNG, owing to which the market is anticipated to grow in the year 2023-2028.

Several Government Initiatives and Schemes Fueling the Market Growth

In the past years, coal has been used mostly in the poor countries to generate electricity and other forms of energy, with natural gas serving as a backup source. Today, emerging economies are looking for alternative sources. These include distributed generation—such as microgenerators and renewable energy, the latter of which depends on storage accessibility and a decrease in generation sporadicity. Authorities and energy providers have turned to economical, environmentally friendly, and generally simple alternative energy sources, though, due to several factors. Liquid petroleum gas (LPG) is frequently indicated with terms.

Income levels determine the purchasing power of the households and are an important factor affecting the demand for LPG cylinder. This is especially relevant among the lower income group households as the major alternative fuels, kerosene, and fuel wood, are available cheaper or at heavily subsidized rates. Several Government initiatives are taken by the government to increase consumption of LPG. Schemes like PAHAL aim at providing clean cooking gas connections to poor households which otherwise use traditional cooking fuels such as firewood, coal, cow-dung, etc. Since the inception of the scheme more than 80 million Ujwala beneficiaries have sought cylinder and average per capita consumption increased to around 3 refills per year. The scheme has gradually changed the adaptation to LPG cylinder by first time users seen as a positive change in the lives of these households which were long dependent on traditional cooking fuels. This has increased the demand for LPG cylinder from households significantly.

LPG cylinder marketeers have introduced smaller package sizes for LPG cylinders. The government has introduced a scheme for poor families where they can swap their 14 kg cylinder for a 5 kg cylinder. Under this scheme, they have the flexibility to switch between 14 kg and 5 Kg Cylinder. The consumers were also given the opportunity to access two 5 kg cylinder scheme. The scheme provides affordability to a large number of consumers in Tier 3 cities and Rural areas. Special subsidiary loans were also provided in which the LPG Marketeers deferred the payback period of loans for a period of one year or until six LPG refills are taken by the Government.

Increasing Village Level Entrepreneurs (VLC) & Digital Services

Increasing per capita income has increased LPG demand from rural and remote areas of the region. Various LPG vendors are continuously investing to improve distributor networks of LPG throughout the countries. Under the Digital India Program, a scheme is established, Common Service Centers (CSE) which are providing larger number of digital services in rural areas. Village level Entrepreneurs (VLC) are the key stakeholders of this scheme. These VLC have set up small agencies which provide LPG enrolment, refill booking and delivery services. These VLC can cater the LPG cylinder demand for remote areas and thus increasing the demand of LPG cylinders by widening distribution network.

Rising populations, incomes, and angles of urbanization are all contributing to rising energy demand in the emerging LPG Cylinder market. This is particularly true in significant portions of Asia, where the need for various fuels and energy usage has increased, most notably to produce power, home heating and cooking, transportation, and commercial applications.

The increased availability of piped natural gas in the region has become a threat to the LPG cylinder market. Due to the allocation of different geographical areas by PNGRB for setting up of new PNG supply chain facility in different regions, the availability of piped natural gas is slowly increasing year by year. LPG is majorly used in the residential sector and the supply of PNG through pipelines has attracted the people as it is safer than LPG. Also increasing distribution network of pipeline gas from Tier 1 to Tier 2 cities and providing better convenience are possessing a major threat to LPG cylinder demand.


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Key Market Challenges

Regulatory Compliance and Safety Standards:

LPG cylinders are subject to stringent safety regulations and standards due to the flammable nature of the gas they contain. Ensuring compliance with these standards across different regions and countries can be challenging, especially when dealing with varying regulatory frameworks. The improper use or mishandling of LPG cylinders can lead to accidents, leaks, and explosions. Ensuring proper training and awareness among users, as well as implementing robust safety measures during manufacturing, transportation, and storage, is a critical challenge.

 In many countries, LPG is subsidized to make it affordable for consumers. However, changing subsidy policies or fluctuating global oil prices can impact the pricing and availability of LPG cylinders, affecting both consumers and industry players.

Infrastructure Limitations

Access to LPG cylinders can be limited in certain areas due to inadequate infrastructure for distribution and storage. Rural and remote regions may face challenges in accessing LPG cylinders, hindering the market's growth potential. The LPG Cylinder Market faces competition from alternative energy sources, such as electricity and natural gas. Balancing pricing strategies to remain competitive while ensuring profitability is a constant challenge for industry players. While LPG is considered a relatively cleaner fossil fuel, concerns about its carbon emissions and environmental impact persist. Addressing these concerns and aligning with sustainability goals is a challenge for the market. The market is witnessing advancements in cylinder materials, design, and safety features. Keeping up with technological innovations and adopting them while ensuring compatibility with existing infrastructure can be challenging.

Key Market Trends

Energy Transition and Clean Fuel Adoption:

The global push towards cleaner and more sustainable energy sources is driving the adoption of LPG as a cleaner alternative to traditional fuels. LPG emits fewer greenhouse gases and pollutants compared to coal and other fossil fuels. As countries aim to reduce their carbon footprints, the demand for LPG cylinders as a cleaner energy solution is on the rise. In many developing and emerging economies, LPG cylinders are becoming a preferred energy source for cooking and heating, especially in rural areas. Governments and organizations are promoting LPG to replace traditional biomass fuels, leading to increased demand for cylinders in these regions.

Technological Advancements in Cylinder Design

Innovations in cylinder design are focused on enhancing safety, efficiency, and user experience. Lightweight composite materials, improved valves, and advanced pressure monitoring systems are being integrated into cylinder designs to make them more user-friendly and efficient. The integration of Internet of Things (IoT) technology is enabling remote monitoring, tracking, and predictive maintenance of LPG cylinders. IoT-enabled cylinders provide valuable data to manufacturers, distributors, and end-users, enhancing safety and optimizing supply chains. Microdistribution models are gaining traction, particularly in regions with limited access to traditional energy infrastructure. These models involve delivering LPG cylinders directly to households and small businesses, ensuring convenient access to clean energy. The market is witnessing a shift towards sustainable packaging solutions. Efforts to reduce plastic waste and promote recycling are leading to innovations in cylinder packaging materials, contributing to a more circular economy. Industries and commercial sectors are diversifying their energy sources to ensure reliability and sustainability. LPG cylinders are being integrated into energy mix strategies as a backup and supplementary energy source during peak demand or energy shortages.

Segmental Insights

Application Insights

The residential segment dominated the global market in 2020, in terms of share, owing to rise in demand for liquefied petroleum gas from residential applications such as space & water heating, cooking, and power generation. In addition, it provides benefits such as cost-effectiveness, energy efficiency, and eco-friendly, which will further drive the market growth in the coming years.