Propane, also known as liquefied petroleum gas (LPG), is a three-carbon alkane which is widely used as a fuel in vehicles, barbecues, residential and commercial buildings and as a petrochemical feedstock. Propane is clean-burning, cost-effective and flexible fuel option which can be used for various application involving cooking, heating and vehicles. The demand for propane is rising in transportation sector such asforklifts, ships, trucks, buses and auto gas vehicles owing to its clean burning nature and lower greenhouse gas emissions as compared to gasoline and diesel.

The global propane market size is estimated to be valued at US$ 98.5 Bn in 2023 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity

The opportunity in transportation sector is expected to drive the growth of global propane market during the forecast period. The global auto gas vehicles market is expected to grow at a significant rate on the back of stringent emission norms by regulatory bodies across the globe. For instance, according to International Association for Natural Gas Vehicles (IANGV), the global natural gas vehicles market is expected to grow at a CAGR of over 17% during the forecast period. Propane being a clean alternative fuel for vehicles is expected to gain significant traction in coming years. The demand for propane powered forklifts, ships and trucks is also rising owing to cost benefits offered by propane as compared to diesel and gasoline.

Porter's Analysis

Threat of new entrants: Low transportation costs and established distribution networks create barriers for new entrants. However, growing demand could attract new players.

Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes like natural gas. However, switch costs limit their power.

Bargaining power of suppliers: Major suppliers like oil and gas producers have significant influence due to their integration across the value chain.

Threat of new substitutes: Substitutes like natural gas and renewables pose threats. However, propane is cheaper to transport than gas.

Competitive rivalry: Competition is high among major players. They compete on pricing, innovation and customer service.

SWOT Analysis

Strengths: Growing automotive sector and LPG vehicles demand. Excellent transportation fuel for rural areas.

Weaknesses: Price volatility depends on crude oil prices. Stringent safety norms increase costs.

Opportunities: Rising industrial demand in Asia Pacific. Adoption in residential and commercial sectors.

Threats: Popularity of electric vehicles and natural gas based heating systems. Fluctuating raw material prices.

Key Takeaways

The Global Propane Market Growth is expected to witness high.

Regional analysis: Asia Pacific propane market is estimated to expand at over 15% till 2030 led by China and India. Rapid industrialization and increasing disposable incomes are fueling industrial and residential demand. Japan and South Korea are also major markets driven by LPG vehicles and petrochemical feedstock uses.

Key players: Key players operating in the propane market 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 in distribution and logistics infrastructure to strengthen their positions.

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