India Liquified Petroleum Gas (LPG) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India Liquified Petroleum Gas (LPG) Market is Segmented by Source of Production (Crude Oil and Natural Gas Liquids) and Application (Residential & Commercial, Industrial, Autofuels, and Other Applications)

Market Snapshot

India Liquified Petroleum Gas Market Size
Study Period: 2019-2027
Base Year: 2021
CAGR: >3.5 %
India Liquified Petroleum Gas Market Key Players

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Market Overview

The liquefied petroleum gas (LPG) market is expected to grow at a CAGR of over 3.5% during the forecast period of 2022-2027. The Covid-19 pandemic has led to a temporary ban on imports & exports and the manufacturing and processing activities across the industries, which decreased the demand for LPG from the consumers. The LPG market is driven by the domestic, industrial, automobile, and commercial business sectors in India. The primary driver of the market is the increasing consumption of LPG and the supporting initiatives from the government to increase the usage of cleaner fuel. However, the expanding penetration of Piped Natural Gas (PNG) for households and the Compressed Natural Gas (CNG) for vehicles as an alternative to LPG is expected to restrain the LPG market growth. Further, the LPG storage is a challenging factor. The domestic LPG usually comes in cylinders, which doesn't provide a continuous supply service and its highly flammable and heavier that has a high tendency to catch fire in case of any leakage, which is expected to hinder the market growth during the forecast period.

  • LPG extracted from natural gas is expected to have a considerable growth during the forecast period due to the government's focus on raising the natural gas share in the energy mix to 15% by 2030 from around 6.7% in 2021.
  • The new demand hubs being created, such as rural LPG households and the favorable scenario for AutoLPG, are expected to create immense opportunities for the LPG players to look for M&A and capacity enhancement in the future.
  • The increasing demand for LPG, on account of government efforts to adopt the usage of cleaner fuel, is expected to drive the market during the forecast period.

Scope of the Report

The Indian Liquified Petroleum Gas (LPG) Market report includes:

Source of Production
Crude Oil
Natural Gas Liquids
Application
Residential & Commercial
Industrial
Autofuels
Other Applications

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Key Market Trends

LPG Extracted From Natural Gas is Expected to Have Considerable Growth Rate

  • The LPG extracted from natural gas is expected to witness significant growth during the forecast period. The Indian government is more focused on using natural gas and has an ambitious target to achieve 15% of the natural gas share in the energy mix by 2030 from 6.7% in 2021. This is anticipated to increase the efforts in LPG production from natural gas in the coming years.
  • Natural gas contains a mixture of gases and liquids (propane and butane) extracted to produce LPG. In India, the natural gas consumption trends have increased significantly over the past several years. In FY2021-22, India's total natural gas consumption has risen to about 65037 Million Standard Cubic meters (MMSCM) from 60815 MMSCM in 2020-21. Such trends are anticipated to continue and positively impact the LPG market in India.
  • Further, the LPG produced from the natural gas need not require any oil refinery; it just needs a gas separation facility that can extract the necessary gases to form the LPG. Hence, LPG extraction from natural gas is less expensive than LPG production from crude oil in refineries. The LPG extracted can be distributed through tankers or pipelines.
  • Therefore, based on the above-mentioned factors, the LPG extracted from natural gas is expected to have a considerable growth rate in the Indian LPG market during the forecast period.
India Liquified Petroleum Gas Market Share

Increasing LPG Demand and Supporting Government Initiatives to Drive the Market

  • The LPG demand in India has been increasing considerably in India. In FY2020-21, the LPG consumption in India has reached 27.6 Million Metric Tonnes witnessing an increase of 5% compared to the FY2019-20. This trend is expected to continue and rise significantly during the forecast period, mainly due to the supporting government initiatives in the country.
  • As of April 2022, the total number of active LPG domestic customers in India has reached about 30.5 crores from 14.9 crore customers in 2015. This is a massive rise in the domestic LPG customers in the country. Likewise, the number of LPG distributors in India rose to 25269 in April 2022 from just around 9686 in 2010 and 15930 in 2015.
  • Further, the LPG bottling plants have been increasing in India's past few years. According to the Petroleum and Planning & Analysis Cell (PPAC), in 2021, the LPG bottling plants reached a total of 202, with a steady rise in demand for LPG in the country. These developments have made India achieve the LPG coverage of 99.8% in 2021 from around 56.2% in 2015. A similar scenario is expected to continue during the forecast period.
  • The growing demand for clean cooking fuels in rural and urban households is expected to boost the country's LPG market in the coming years. Moreover, the supportive government initiatives in the form of initiatives such as the Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries scheme to make clean cooking fuel such as LPG available to the rural and deprived households are expected to remain the major driving factor in fueling the LPG market growth in India.
  • Hence, the increasing demand for LPG supported by government initiatives is expected to drive the market and is likely to see significant development during the forecast period.
India Liquified Petroleum Gas Market Outlook

Competitive Landscape

The Indian Liquified Petroleum Gas (LPG) market is moderately consolidated. Some of the major companies include Indian Oil Corporation Ltd., Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, Reliance Petroleum Ltd, and TotalEnergies SE.

Recent Development

  • In February 2022, Indian Oil Corp (IOC) announced the plans to construct three new plants in Northeast India to increase its LPG bottling capacity by nearly 53% or to 8 crore cylinders annually by 2030, to meet the growing demand in the region. Furthermore, the total investment in the plant expansion is likely to range between INR 325-350 crore.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Market Size and Demand Forecast, in USD billion, till 2027

    3. 4.3 LPG Production and Consumption Trends in India, till 2021

    4. 4.4 Import and Export Statistics of LPG in India till, 2021

    5. 4.5 LPG Active Domestic Customers (in Lakh) by Region in India, 2021

    6. 4.6 Number of LPG Distributors by Region in India, 2021

    7. 4.7 Recent Trends and Developments

    8. 4.8 Government Policies and Regulations

    9. 4.9 Market Dynamics

      1. 4.9.1 Drivers

      2. 4.9.2 Restraints

    10. 4.10 Supply Chain

    11. 4.11 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Source of Production

      1. 5.1.1 Crude Oil

      2. 5.1.2 Natural Gas Liquids

    2. 5.2 Application

      1. 5.2.1 Residential & Commercial

      2. 5.2.2 Industrial

      3. 5.2.3 Autofuels

      4. 5.2.4 Other Applications

  6. 6. COMPETITIVE LANDSCAPE

  7. 7. Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

  8. 8. Strategies Adopted by Leading Players

  9. 9. Company Profiles

    1. 9.1 Indian Oil Corporation Ltd.

    2. 9.2 Bharat Petroleum Corporation Limited

    3. 9.3 Hindustan Petroleum Corporation Limited

    4. 9.4 Reliance Petroleum Ltd

    5. 9.5 TotalEnergies SE

    6. 9.6 Shell plc

    7. 9.7 SUPERGAS (SHV Energy Pvt Ltd.)

    8. 9.8 Jyothi Gas Pvt Ltd

    9. 9.9 Eastern Gases Ltd

  10. *List Not Exhaustive
  11. 10. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The India Liquified Petroleum Gas (LPG) Market market is studied from 2019 - 2027.

The India Liquified Petroleum Gas (LPG) Market is growing at a CAGR of >3.5% over the next 5 years.

Indian Oil Corporation Ltd., Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, Reliance Petroleum Ltd, TotalEnergies SE are the major companies operating in India Liquified Petroleum Gas (LPG) Market.

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