KUALA LUMPUR: Southeast Asia’s (SEA) liquefied petroleum gas (LPG) consumption is projected to grow at an average rate of 2.0% annually from 2023 to 2033, according to BMI, a unit of the Fitch group.
The research firm reported that the combined LPG consumption of the ten SEA countries accounts for 15.4% of the Asia Pacific region’s total LPG market, which stands at 4.8 million barrels per day (mb/d).
BMI estimates that SEA’s aggregate LPG consumption reached approximately 740,000 b/d in 2023.
“Ongoing subsidies for LPG in Indonesia, Thailand and Malaysia may continue to support LPG consumption in the residential and commercial sectors,“ it said in a statement.
The report noted that Indonesia’s LPG demand is expected to grow closely, trailing Japan and South Korea by volume.
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It said the pace of LPG demand growth varies across countries, influenced by different levels of economic and population growth, industrialisation, urbanisation and government policies.
BMI highlighted that LPG consumption has been consistently increasing, bolstered by rapid urbanisation.
Sectoral demand analysis reveals that LPG usage in the residential, commercial, and public sectors accounted for 71% of SEA’s total LPG consumption in 2023, followed by non-energy uses at 17% and manufacturing at 6.0%.
In contrast, LPG demand from the transport sector, which comprises 3.0% of the region’s total consumption, has been steadily declining due to the decreasing popularity of LPG-driven vehicles.
“The adoption of electric vehicles (EVs) alongside higher costs further undermines LPG use in the transport sector,“ it said.
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LPG, predominantly produced in Indonesia, Thailand, Malaysia, Singapore, and Vietnam, was estimated at 689,000 b/d in 2023, with Indonesia accounting for over 32 per cent of production and Thailand for 23%.
Looking ahead, the commencement of the 2.0 million tonnes per annum (mtpa) ZLNG plant in Sabah in 2027 is expected to enhance Malaysia’s LPG production outlook.
