Liquefied Petroleum Gas (LPG) is a flammable mixture of hydrocarbon gases, or simply propane or butane. LPG is used as fuel in the household and commercial heating appliances, vehicles, aerosol propellant, refrigerants and cooking appliances. LPG serves as an alternative fuel solution in industries, residential areas, chemical, automotive, and refinery industries. Residential and auto fuel applications hold the largest market share of global LPG market.
The multiple benefits of LPG like zero toxicity, simple access, portability, convenience and cost-efficiency compare to wood and coal have increased the demand for LPG in commercial and residential heating appliances and cooking equipment. The residential use of LPG is going to increase more with the rise in expenses due to the use of electricity in the BRICS economies. The discounts and subsidiaries offered by various governments of the world on LPG cylinders is another significant growth factor for the global LPG market.
LPG is also called as autogas due to its fast combustion and more energy content compared to other fuels in automobiles. Autogas is also environmental-friendly and greener compared to gasoline and diesel. The support from regional government and low cost of adoption are promoting the autogas market globally. The low emission of carbon dioxide has made it the sole choice for cooking purpose in the residential and commercial sector. LPG can be easily transported through pipelines, tankers and cylinders to any location at fewer expenses.
Liquefied petroleum gas is extensively used in the rural areas of countries. Developing countries like Indonesia has introduced a conversion program, which involves the distribution of LPG cylinders and stoves to people in the rural areas. Similarly, the government of India has introduced several initiatives that can support LPG cylinder distribution to rural population at low costs. The more conversion towards LPG usage in those areas increases the global share of LPG markets.
Furthermore, the growing adoption of non-associated gases will decrease the effects of fluctuating crude oil prices on the LPG cost. The reduction in the transit cost will open the Panama Canal between the Asia Pacific and North America reducing the price of LPG and increasing the exports from North America to meet the growing demand for LPG in the Asia Pacific regions. The opening of Panama Canal also increases the exports from North America to Europe.
Independent Research Consultant
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