The global Propane market size was worth around USD 85.41 Billion in 2022 and is predicted to grow to around USD 132.01 Billion by 2030 with a compound annual growth rate (CAGR) of roughly 5.59% between 2023 and 2030.
The demand for propane, which is frequently employed as a heating fuel, can be significantly influenced by weather conditions such as cold temperatures and precipitation. Propane is a critical commodity during the winter months in regions with colder climates, as it is employed to heat residences, businesses, and other facilities.
The demand for propane may increase and prices may rise as a result of the increased energy required to maintain comfortable interior temperatures during periods of low temperatures. In addition to bitterly cold temperatures, heavy snowfall can have an impact on the propane market. Snow can impede the ability of propane delivery vehicles to reach their destinations, resulting in price increases and supply shortages.
This is due to the fact that a significant number of propane delivery vehicles are not equipped to navigate through deep snow or icy roads, and the likelihood of accidents is elevated during severe weather conditions. In certain instances, householders may encounter challenges in accessing their propane tanks due to snow accumulation.
As a result, atmospheric conditions have a big impact on the propane market. Demand for propane may increase as temperatures decrease and precipitation increases, resulting in elevated prices. Customers and propane suppliers must be prepared to overcome the challenges that severe weather conditions present.
This includes ensuring that there is an adequate supply of propane, investing in the necessary transportation and delivery equipment, and taking the necessary precautions to ensure the safe and efficient use of propane. Consequently, this contributes to the revenue of the propane market.
For instance, tax incentives for propane usage may motivate businesses and consumers to adopt propane as their primary energy source. This can result in an increase in demand for propane, which in turn drives up market prices. In the same vein, laws governing the production and use of other energy sources may have an impact on propane demand.
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Regulations that limit the use of particular fossil fuels, such as coal or oil, may, for instance, increase the demand for propane as an alternative heating source. Additionally, governmental policies can have an impact on the infrastructure and logistics of the propane market.
For example, policies that allocate funding to the construction of propane storage and transportation infrastructure can enhance the availability of propane in the market, resulting in more consistent prices. In the same vein, policies that encourage the use of propane in vehicles, such as tax credits or grants, can increase the demand for propane and generate new opportunities for growth in the propane market CAGR.
Government policies, which can affect both supply and demand factors, can therefore have a significant impact on the propane market. Propane suppliers and consumers must be cognizant of these policies and remain informed about potential market changes in the future. Stakeholders can make informed decisions that contribute to the industry's long-term sustainability and viability by comprehending the role of government policies in the propane market.
Major Market Drivers: The propane market is primarily being supported by the growing global movement toward sustainable energy sources and the emerging trend of decarbonization, which is a consequence of the escalating environmental concerns and stringent regulatory restrictions. Additionally, the demand for propane is increasing in the transportation sector, industrial verticals, and households due to its clean-burning property and reduced greenhouse gas (GHG) emissions.
Key Market Trends: The market growth is being supported by the pervasive adoption of this compound as a critical raw material for the production of plastics and chemicals. Additionally, the increasing use of propane in the petrochemical, power generation, and agricultural sectors is supporting the market outlook.
Air Liquide S.A., BP plc, Chevron Corporation, China National Petroleum Corporation, China Petroleum & Chemical Corporation, ConocoPhillips Company, Eni S.p.A., Evonik Industries AG, Exxon Mobil Corporation, GAIL (India) Limited, Gazprom, Indian Oil Corporation Ltd., Royal Dutch Shell plc, Saudi Arabian Oil Co., and TotalEnergies SE are among the major propane market companies.
Geographical Trends: The Asia Pacific region had the largest propane market due to the emergence of industrialization, urbanization, and economic development. Additionally, the increasing demand for propane in a variety of sectors, such as agriculture, manufacturing, and residential heating, is further fostering the market's expansion. Additionally, the market growth in this region is being positively impacted by the increasing number of investments by major companies in propane-based infrastructures, the extensive utilization of this compound to meet the increasing energy demands in rural and urban areas, and the expansion of LPG distribution networks.
Challenges and Opportunities: The competition from readily available and reasonably priced alternative fuels, such as electricity, natural gas, and renewable energy sources, is having a significant negative impact on the revenue of the propane market. Nevertheless, it is anticipated that the market will experience significant growth opportunities in the future as a result of the growing transition to more sustainable and environmentally friendly energy sources and the introduction of propane-powered appliances, equipment, vehicles, and power systems.
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LPG, or liquid propane, is a preferred option for residential, commercial, and industrial applications due to its portability and simplicity of storage. Furthermore, the extensive utilization of LPG as a critical energy source for outdoor activities, such as camping and barbecuing, and remote regions, as well as off-grid locations, is another substantial growth-inducing factor. The adaptability of transportable LPG cylinders and containers, which enables their use in a variety of appliances, is another factor driving the market forward. As per NBS data, China produced 291.61 million mt of LPG, naphtha, gasoline, jet/kerosene, gasoil, and fuel oil, a 3.9% increase year over year, despite a 6.3% decrease in hydrocarbon throughput during the said period.
Moreover, in May 2022, China imported 2.12 million mt of LPG, propane, and butane, a 7.1% increase from the previous month. In addition, the market overview is being positively impacted by the increasing demand for a consistent supply of gas propane, which is delivered through pipelines in urban areas and industries to power heating systems, furnaces, and industrial processes efficiently. Concurrently, the complementary nature of liquid and gas propane meets a wide range of energy needs, thereby increasing their combined demand for a variety of applications.
Breakup by Grade:
- HD-5 Propane
- HD-10 Propane
- Commercial Propane
The report has provided a comprehensive analysis and breakdown of the market based on the grade. This encompasses commercial propanes, HD-5, and HD-10.
The propane market is growing substantially due to the increasing use of HD-5 propane in applications that necessitate precise and consistent combustion, such as forklifts, residential heating, and food processing, due to its high purity and low moisture content.
In accordance with this, HD-10 propane remains a popular choice for similar applications due to its slightly relaxed purity standards, which provide a cost-effective alternative while maintaining acceptable performance. Furthermore, the market expansion is presented with lucrative opportunities due to the increasing demand for commercial propane in a variety of industrial sectors, such as agriculture, construction, hospitality, and transportation, due to its adaptability and versatility in various equipment and procedures. The extensive use of the product as a dependable fuel source, which supports operations like irrigation pumps, space heating, and fleet vehicles, is also stimulating the global market.
Breakup by End Use Industry:
- Residential
- Commercial
- Transportation
- Others
The residential sector dominates the propane market share.
The report has provided a comprehensive analysis and breakdown of the market based on the end-use industry. This encompasses a variety of sectors, such as residential, commercial, and transportation. The report indicates that the residential sector comprised the greatest portion of the market.
Global Propane Market: Competitive Players
Some of the most important market players in the global propane market are
- Saudi Arabian Oil Co. (Saudi Arabia)
- Exxon Mobil Corporation (U.S.)
- CNPC (China)
- B.P. p.l.c (U.K.)
- Shell plc (U.K.)
- PDVSA - Petróleos de Venezuela, SA. (Venezuela)
- Gazprom (Russia)
- Chevron Corporation. (U.S.)
- Kuwait Petroleum Corporation (KPC) (Kuwait)
- Petrobras (Brazil)
- LUKOIL (Russia)
- ROSNEFT (Russia)
- Abu Dhabi National Oil Company (UAE)
- China Petrochemical Corporation. (China)
- Petroliam Nasional Berhad (PETRONAS) (Malaysia)
- Eni S.p.A. (Italy)
- ENOC Company (UAE)
- NNPC (Nigeria)
- EGPC (Egypt)
- Equinor ASA (Norway)
- Oil and Natural Gas Corporation (India)
- P.T. Pertamina Gas (Indonesia)
Global Propane Market: Regional Segment Analysis
- North America The U.S.
- Europe The UK France Germany
- The Asia Pacific China Japan India
- Latin America Brazil
- The Middle East and Africa
Competitive Environment:
The competitive environment that characterizes the global propane market statistics is dynamic and subject to a number of influences. Major oil and gas companies, regional energy providers, and LPG distributors are among the market's key participants. These actors frequently participate in exploration, production, and distribution activities, which have an impact on supply dynamics.
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The diverse applications of propane, which encompass industrial processes and transportation as well as residential heating and cookery, also contribute to market competitiveness. These companies have been motivated to invest in research and development to improve the environmental performance and efficacy of propane as a result of the increasing popularity of cleaner energy trends.
Geopolitical events, supply disruptions, and changes in crude oil prices have a significant impact on the competitive environment, which affects pricing and trade dynamics. Regulations, environmental regulations, and technological advancements all have an impact on competitive strategies as businesses work to meet shifting market demands.
Propane Market Recent Developments:
- November 2023: BPCL signs a 15-year propane supply agreement, worth Rs 63,000 Crore, with GAIL for latter’s PDH-PP (Propane Dehydrogenation and Polypropylene) Plant project in Usar, Maharashtra.
- November 2023: The West Virginia Department of Health and Human Resources (DHHR) announced a supplemental payment to assist eligible residents with propane heating expenses for the 2023-24 winter season.
- September 2023: Tankfarm, the tech-enabled propane distribution platform, announced the closure on a US$ 23 Million Series-B round led by a handful of prominent family offices and existing investors. The capital will go towards customer acquisition, continued development of Tankfarm’s patent-pending technology platform, and extending its national propane delivery footprint which currently spans 37 states and over 400 locations.
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