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Analysts forecast 2025 growth in India’s LPG imports to be slightly lower compared to previous year
The latest LPG Forecaster published by maritime research consultancy Drewry highlighted the 24 per cent surge in India’s 2024 LPG imports, propelled by strong residential consumption, which was in turn fuelled by the general elections, low domestic production and diversion of domestic LPG to the petchem sector.
However, India’s import growth is likely to slow down in 2025 as residential demand eases, with the policy shifting towards natural gas and biofuels as LPG penetration nears saturation.
Meanwhile, with almost all of India’s LPG supply coming from the Middle East, the US-China tariff war could encourage China to source more from the Middle East, forcing India to look elsewhere and thereby altering some changes in trading patterns.
However, varying butane content in cargoes from the Middle East versus the US could make sourcing from the latter difficult.
Residential and industrial sectors ignite surge in domestic LPG demand
India’s LPG consumption surged in 2024 due to a combination of low global prices, the general elections and increase in rural LPG consumption. The country added 7.5 million low-income households under the Pradhan Mantri Ujjwala Yojna (PMUY) Phase 2 subsidy scheme, covering 103 million households since the scheme was launched in 2016.
Stable LPG cylinder prices throughout 2024 further incentivised residential consumption while industrial consumption received a boost from, in particular, the ceramics industry in Gujarat’s Morbi region, with ceramic producers shifting to propane due to its favourable price compared to PNG on an energy basis.
The Indian LPG market navigates seasonal ups and lows with demand peaking in the winter, remaining steady in the summer and declining in the monsoon. Additionally, elections, festivals and global fuel prices sway the LPG demand in the country.
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