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Increased initiatives by government for LPG vehicles drive the growth of LPG market

Press release July 25, 2014 Liquefied petroleum gas market, lpg market, lpg market price

The Global LPG Market 2014-2018, has been prepared based on an in-depth market analysis with inputs from industry experts.

The global LPG market is expected to be worth USD 291.42 billion by 2020. Increasing population along with regulatory support and subsidies are expected to be some of the major drivers of the market, especially for the next six years. A type of hydrocarbon, which also constitutes of propane and butane, LPG is liquefied to make transport easy. It is usually stored or transported in pressurized cylindrical containers. LPG is a clean, low-carbon and an efficient source of energy, making it the preferred source of energy for various end-user segments. The increase in global energy consumption and its rising demand from various sectors has further boosted the growth of LPG market.

This report, Global Liquefied Petroleum Gas (LPG) Market 2014-2018, gives an in-depth analysis with focus on the Americas, EMEA and the APAC regions. Covering the growth prospects and the market landscape, the report also highlights the key vendors of the market.

Government support increases demand for LPG

The enhanced demand for LPG over other conventional fuels is mainly due to the cost benefits. The recent environmental drive of governments has further led to the increase in usage of LPG vehicles, thereby increasing the demand of LPG consumption on a global scale. For instance, the US Department of Energy has a federal law and policy for LPG that covers alternative fuel tax exemption which deems alternative fuels to be non-taxable. Similarly, the Government of Hong Kong announced schemes that provisions incentives for the replacement of diesel taxis with LPG ones. This support is driving the demand for LPG and, thereby, increasing the LPG market share. Furthermore, on the other hand, the petrochemical industry is expected to continue absorbing the price-sensitive demand of LPG in coming years, owing to rapid petrochemicals capacity addition in the Middle East and Asia Pacific.

Capital-intensive market makes investors wary

Despite the support and energy efficiency of LPG fuel, the major factors that are hindering the LPG market growth are the fluctuations of the crude oil prices and downstream derivatives, coupled with its high transportation costs. Furthermore, the capital-intensive nature of the market is also making key investors cautious. Wary of the long gestation period and need for high capital investment, many prospective investors are staying away from this market, despite the latent opportunities.

Market outlook

The global LPG demand from associated gas is predicted to reach 83.28 million tons by 2018. However, since the LPG source varies with region, the demand of LPG in North America is met from natural gas, whereas Asia Pacific is primarily dependent on various LPG refineries. Furthermore, the increased use of LPG as a fuel in the domestic space, especially for cooking and heating, is expected to further boost the market over the next few years at a CAGR of 4.5% from 2012 to 2018. Additionally the auto gas demand in countries such as Poland, South Korea and Turkey will contribute towards its demand.

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Liquefied petroleum gas market, lpg market, lpg market price