Propane is a three-carbon alkane with the molecular formula C3H8. It is a by-product of natural gas processing and petroleum refining. Propane has a higher energy density than natural gas and can be transported and stored more easily as a liquid. It is increasingly being used in vehicles, forklifts, residential heating and various commercial applications. The increasing demand for propane from transportation and commercial sector is driving its adoption at a brisk pace.
Market key trends:
The growing demand from transportation sector is one of the key trends driving the propane market. Propane autogas is gaining prominence as an alternative fuel, especially for light and medium-duty vehicles. It provides an affordable and low-emission option compared to gasoline or diesel. Many fleet operators are opting for propane vehicles to lower operational costs and reduce greenhouse gas emissions. Rising environmental concerns and government incentives or mandates in regions like Europe and North America are fueling adoption of propane-powered trucks and buses. Manufacturers are introducing more propane-based models to tap the growing demand. These factors are expected to accelerate penetration of autogas in commercial and public transportation during the forecast period.
Segment Analysis
Propane has two key sub segments - residential and commercial. The residential segment currently dominates the global propane market and accounts for over 60% share. This is because propane is increasingly being used for residential heating and cooking purposes especially in rural areas devoid of natural gas pipelines. It provides a cleaner and more economical alternative to fuel oil for residential heating in many parts of the world.
Key Takeaways
The Global Propane Market Size is expected to witness high growth over the forecast period.
Regional analysis: North America will continue to be the largest market for propane during the forecast period due to abundant availability of shale gas leading to high domestic production in the US. Asia Pacific is expected to be the fastest growing regional market attributed to surging demand for LPG in residential sector from developing countries such as India and China where LPG is used for cooking purposes.
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).
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