The Saudi Arabia Liquefied Petroleum Gas (LPG) market was valued at USD 631.86 million in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 9.13% over the forecast period, reaching a value of USD 10,229.51 million in 2054. Saudi Arabia, one of the world's largest producers of LPG, utilizes its extensive refining capacity and natural gas reserves to satisfy both domestic and international demand. The market is experiencing consistent development, which is being facilitated by the government's advocacy for energy diversification as part of the Vision 2030 initiative and the increasing investment in energy infrastructure. LPG's significance as a primary energy source is guaranteed by the Kingdom's substantial dependence on it for residential, commercial, and industrial applications.
The residential sector continues to be the primary consumer of LPG in Saudi Arabia, predominantly for the purpose of cooking and heating. The demand is also considerably influenced by the commercial and industrial sectors, which utilize the material in transportation, petrochemicals, and manufacturing processes. LPG is regarded as an environmentally favorable substitute for conventional fuels, and its utilization is consistent with global sustainability trends. The adoption of LPG across various sectors has been further accelerated by the Kingdom's initiatives to reduce its carbon footprint. Furthermore, LPG's prevalence in the domestic market is further bolstered by its competitive pricing in comparison to other energy sources.
Another critical element of the industry is Saudi Arabia's LPG export market. The Kingdom exports substantial quantities of LPG to Asia, with a particular emphasis on countries such as China, South Korea, and Japan. These countries depend on Saudi Arabia's consistent supply to satisfy their energy requirements, particularly for industrial and residential purposes. The Kingdom's competitive advantage in the global LPG market is a result of its well-established logistics infrastructure and strategic location. Additionally, the market is stabilized by Saudi Arabia's long-term contracts with major importers, despite fluctuations in global energy prices.
Market Segmentation
According to the source, the Liquefied Petroleum Gas (LPG) market is divided into three segments: Refinery, Associated Gas, and Non-Associated Gas.
Cylinders and bulk supply are the primary distribution channels for the LPG market in Saudi Arabia. The primary sales channel for LPG is cylinder-based distribution, particularly in the residential and minor commercial sectors.
In Saudi Arabia, LPG is employed in a wide variety of applications, such as the residential, commercial, agricultural, industrial, transportation, hospitality, and food and beverage sectors.
Major Players
Prominent international oil and gas companies with considerable stakes in the Saudi LPG market include ExxonMobil Corporation, Shell PLC, TotalEnergies SE, BP PLC, Chevron Corporation, and Repsol S.A.
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