Liquefied Petroleum Gas (LPG) consumption has emerged as a vital source of energy in India especially in the domestic sector for cooking purposes which have played a major role in fulfilling energy security and achieving sustainable development. They have various forms of energy sources, recent government policies, changes in consumption patterns, and the volatility in the present situation of LPG prices in India have marked the present scenario of the LPG market of India. However, the growth of the import and export market has also contributed a lot to determining the nature of the market. This concern focuses on the above-highlighted aspects to give a general understanding of the LPG market in India.

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Recent Policies Impacting the LPG Market:

To promote the use and availability of LPG in India, the government of India has come up with several policies. Among them, there is the Pradhan Mantri Ujjwala Yojana (PMUY) launched in the year 2016. The objectives of PMUY are to provide LPG connections to families living below the poverty line so that they can stop using traditional fuels such as firewood and kerosene. As of March 2021, PMUY has proved a phenomenal success by the way it managed to achieve a total of over 8 crore LPG connections to rural households thus enhancing the demand for LPG as well. Another major policy is the Direct Benefit Transfer for LPG (DBTL) policy widely known as PAHAL which was aimed at eradicating subsidy leakages and making sure that the beneficiaries are reached. As to PAHAL, subsidies are electronically credited into the consumers’ bank accounts to enhance efficiency.

Also, the government through the National Policy on Biofuels 2018 has been supporting the use of cleaner fuels through Bio LPG. This policy fits well within India’s goal as one of the leading countries in worldwide emission of carbon and shift from the traditional source of energy.

New Connections and Market Penetration:

The connections of LPG have been focused as the objectives of government programs. PMUY has played a vital role in increasing the LPG consumer base, especially in rural areas and below the poverty line of households. LPG coverage for Indian Households reached 91% in December 2022 which was only 56% in December 2015. The government has not only enhanced the living standards through the promotion of LPG but has also empowered women through a reduction of time spent on firewood collection and time spent indoors exposed to bad terrible black cookery smoke. Such socio-economic implication emphasizes the need to have LPG connectivity increase to adopt sustainable development.

Fluctuating Prices of LPG

LPG prices are market reflectors and are thereby dependent on such factors such as crude oil prices, exchange rates, and international supplies and demands. To protect its consumers from volatility, the Indian government intervenes in the price-setting mechanism of LPG; the latter is subsidized to remain as low as possible for domestic usage. LPG prices have now gone up and have for several years exhibited volatility in their prices. For instance, with the outbreak of COVID-19, global crude oil prices drastically dropped and this affected LPG prices for some time. But after regaining the global markets and heightened demand, LPG prices have raised a brow on the expenditure and consumption patterns of a normal family.

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Conclusion

The market trends that are particularly prevalent in the Indian scenario are that it has a sound growth rate which is mainly supported by government policies, rising consumption, and a growing LPG market. PMUY and PAHAL the two programs have greatly improved LPG availability and affordability in the market especially in the rural regions. However, the event causes a specific problem of fluctuating market and import dependence to occur. Maintaining the low prices of LPG in the country, while keeping an eye on the country’s fiscal health and simultaneously focusing on a strong supply chain is going to be the key to sustaining the trend for the long term. Also, diversification and the use of other forms of LPG like bio-LPG are beneficial for the long-term security of supply and the environment. According to the UnivDatos Market Insights analysis, “India LPG Market” report, the market was valued at 15 billion in 2023 and growing at a CAGR of ~3.4% during the forecast period from 2024 – 2032.