India LPG Future Outlook Demand and Growth Analysis with Forecast 2017-2030
Posted by Sophia Jones on September 5th, 2017
India becomes 2nd largest LPG importer globally
Indian LPG imports have been registering some remarkable trends in the last 10 years. The growth trends over the last 10 years, 5 years and 1 year are: 17% CAGR (FY07 to FY17), 14% CAGR (FY12 to FY17) and 23%. At nearly 11 million tonnes in FY17, India surpassed Japan’s imports at 10.6 million tonnes.
Sustained growth in LPG consumption, new demand centers & demand drivers in development
The government has gone full throttle in promoting LPG as a reliable fuel through schemes such as Pahal, Ujjwala, Direct Benefit Transfer and 'Give it Up' which led to increased adoption of LPG in residential segment. While 'Pahal' got enlisted under Guinness Book of World Record for its largest cash transfer at a whopping USD 6.5 billion. All the same, under the Ujjwala scheme free LPG connections will be provided to 5 crore poor households by 2019.
A rapid increase in urban population combined with increasing LPG penetration in rural areas has resulted in a 10% growth in LPG consumption, making India the second largest LPG consumer in the World at 19 million tonne per year. Based on Government's continued efforts to promote clean fuel and increased adoption by consumers, LPG consumption is expected to see a sustained double-digit growth in the years to come.
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Avenue for market diversity driven by favorable prices
While over 90% of demand for LPG comes from residential consumers, a consistent hike in the excise duty for automotive fuels such as diesel and petrol has made commercial LPG a favorable option for AutoLPG segment. Owing to a significant drop in the crude oil prices and favorable economics vis a vis petrol and diesel, AutoLPG sales registered a growth of 4.9% during FY17. According to SIAM, the domestic passenger vehicle sales is likely to reach 7%-9% growth in FY18.
Significant investments and infrastructure strengthening in pipeline for LPG sector
The ongoing upsurge in LPG consumption as well as penetration in rural segment is driven by LPG’s practical advantage and an enhanced positive perception as an agent for women empowerment and social change. With new geographical shifts & expansions in demand base, there is a significant potential for LPG infrastructure addition and geographical diversification.
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