May 18, 2024
Propane Market

The Growing Propane Market is Estimated to Witness High Growth Owing to Rising Demand for LPG as a Clean Fuel

Propane is a three-carbon alkane with the molecular formula C3H8. It is a flammable gas used as a fuel for heating, cooking and vehicles. Propane is mainly used as an aerosol propellant, refrigerant, and fuel for portable stoves and vehicle fuel. The rising adoption of propane across various end-use industries like agricultural, residential, commercial and auto fuel is driving its demand globally.

The Global Propane Market is estimated to be valued at US$ 113.48 Bn in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the Propane Market Growth are Chevron Corporation (U.S.), Royal Dutch Shell Plc (U.K.), Exxon Mobil Corporation (U.S.), ConocoPhillips (U.S), Reliance Industries Ltd. (India). Major players are investing heavily in developing infrastructure for storage, pipeline and distribution of propane to increase accessibility and availability in new markets.

Major opportunities in the propane market include rising usage of LPG as auto fuel in developing nations and remote locations with lack of pipeline infrastructure. Countries like India and China are promoting use of LPG as an auto fuel to reduce vehicular emissions which is boosting demand. With environmental regulations getting stringent, demand for clean fuel like propane is increasing globally.

Key players are focusing on global expansion through strategic partnerships, joint ventures and acquisitions to cater to growing demand from various end-use industries. Rapid industrialization and infrastructure development activities in Asia Pacific and Middle East Africa is driving lucrative opportunities for market players in these regions.

Market Drivers

Rising demand for LPG as a clean fuel is a major market driver. LPG produces lesser emissions as compared to gasoline and emits very low particulate matter making it an attractive auto fuel. Many nations are promoting use of LPG in vehicles and power equipment to reduce air pollution. This is boosting consumption significantly across the globe.

PEST Analysis

Political: The propane market is influenced by government policies and regulations regarding fuel distribution, safety standards, and emissions. Changes in transportation laws and tariffs could impact supply and demand dynamics.

Economic: Factors such as GDP growth, disposable income levels, and energy prices affect the demand for propane from industries and households. High energy costs make propane a relatively affordable option for applications like agriculture, transport, and home heating.

Social: Shifting demographic trends and lifestyle changes shape the consumption of propane. Population centers gravitate towards cleaner energy sources. Greater awareness about health and environmental impacts also sways preferences.

Technological: Advancements in extraction methods augment supply. Dual-fuel vehicles expand the scope of propane usage. Investments in distribution infrastructure and digital solutions enhance efficiency. The expansion of distributed energy systems presents an opportunity.

The United States accounts for the largest share of the global propane market currently in terms of value. With abundant reserves and a well-established supply chain, America satisfies domestic needs and exports extensively to other regions. Canada and China also feature among the major revenue generators due to their sizable resource bases and growing consumption from various end-use industries.

The Asia Pacific market is projected to expand the fastest during the forecast period, driven by socio-economic progress across developing nations. Rapid urbanization and industrialization will spur demand from sectors like chemicals, transportation, power generation, agriculture and more. Investments to build new LPG import terminals and distribution networks aim to capitalize on these opportunities arising from Asia’s development.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it