India LPG Market: Current Analysis and Forecast (2024-2032)

Liquefied Petroleum Gas (LPG) Industry in India has grown and evolved remarkably recently. For ages, Indians have used biomass for cooking; the government has actively marketed LPG as a less pollutive and efficient fuel type. Changing this scenario, the Pradhan Mantri Ujjwala Yojana (PMUY), launched in 2016, targets giving out LPG connections to women from below-poverty-line families. According to the govt. In India, by 2023 the scheme has provided more than 90 million connections which has boosted the use of LPG in rural areas.

Recent incidents indicate that the nature of the sector is constantly evolving. The government has been putting its efforts on bringing up the LPG facilities particularly the bottling plants and pipeline networks to support consistent supply all over the country'. In the year 2022, the Paradip-Hyderabad pipeline commissioning was successfully done to enhance the distribution network and decrease transportation expenses. The market of LPG is also experiencing a growing propensity of privatization. Currently, numerous firms such as Reliance and BPCL are venturing to develop their LPG distribution networks which will further accelerate the demand for LPG in India.

Based on source, the India LPG market is segmented into refinery, associated gas, and non - associated gas. The refinery segment acquired a significant share of the India LPG market due to its established infrastructure and higher production capacity compared to other segments. Crude oil refining plants play a significant role in participating in the LPG supply chain in the country through the processing of crude oil into various products, which include LPG. The number of refineries located all over India makes an adequate and sustainable supply of LPG available for the rising demand for domestic and industrial uses.

Based on application, the India LPG market is segmented into residential/commercial, chemical, industrial, auto fuel, refinery, and offshore. The residential/commercial segment commands a significant share due to several key factors. Primarily, the government's extensive efforts to promote LPG as a clean cooking fuel have led to widespread adoption in households. Moreover, the increasing rates of urbanization and increasing disposable income have also fueled the usage of LPG across both the urban and the rural regions. Further, LPG has been favored for domestic use mainly because of the benefit associated with its convenience and efficiency as a cooking method which is further driving the Indian LPG market.

For a better understanding of the market adoption of the India LPG, the market is analyzed based on its state-wise presence in India such as North India, East India, West India, and South India. North India has significantly contributed to the expansion of the Indian LPG market. North India holds a significant share of the Indian LPG market due to a combination of demographic, economic, and policy factors. Major states situated in this area include Uttar Pradesh, Punjab, Haryana, and Delhi, all of which have large populations; this makes residential use of LPG high. The overall demand for cooking fuel can also be attributed to many households that are found in Uttar Pradesh, the most populous state in India.

Several Government policies have played a major role in increasing the use of LPG in North India. The major scheme of cash transfer in this regard is the Pradhan Mantri Ujjwala Yojana (PMUY) which is effective in providing LPG connections to the women of below-poverty line BPL) households of this region. Due to focusing the scheme on the rural regions where traditional biomass use technique was common, millions of houses have been switched to LPG. A significant percentage of over 90 million connections under PMUY was in North India by 2023, thereby, increasing the region's LPG consumption.

Some of the major players operating in the market include Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), Petro Vietnam Gas, Reliance Industries Limited (RIL), Mangalore Refinery and Petrochemicals Ltd., SUPERGAS, Aegis Logistics Limited, A R Hose Pvt ltd., and MAKEEN Energy.