India is expected to overtake China as the world’s largest cooking gas LPG residential sector market by 2030, Wood Mackenzie said on Tuesday.
“Liquefied petroleum gas (LPG) demand in the residential sector will continue to see sustainable growth at a cumulative annual growth rate (CAGR) of 3.3 per cent, reaching 34 million tonnes (MT) in 2030 as households’ dependence on solid biomass diminishes in the long run supported by rising average household incomes and urban population,” it said in a report.
Driven by environmental and health concerns, the government has also been implementing schemes to help lower-income families cope with the cost of switching from dirtier biomass to LPG.
The Direct Benefit Transfer of LPG (DBTL) gives out subsidies to the vulnerable population, while the Pradhan Mantri Ujjwala Yojana (PMUY) provides families living below the poverty line access to free LPG stoves.
Wood Mackenzie research analyst Qiaoling Chen said: “Although nationwide LPG coverage has reached 98 per cent, up 42 per cent from 2014, usage is still low.
Average annual cylinder refills have not kept up with the pace of new connections, with average consumption remaining below the benchmark of 12 cylinders.”
Even with subsidy and the initial cost of set-up covered by the government, LPG is more expensive than biomass. Still, the Indian government is committed to roll out plans to further address affordability and infrastructure challenges in the LPG sector.