Australia Liquefied Petroleum Gas Market Size, Share, Growth Analysis Report and Forecast Trends 2025-2034

Australia Liquefied Petroleum Gas Market Trends

The growth of the Australia liquefied petroleum gas market is driven by LPG’s clean-burning nature, emitting fewer greenhouse gases compared to coal and oil, thus making it a more environmentally friendly energy source. It reduces the carbon footprint when compared to traditional fuels like diesel and petrol, while also improving air quality. LPG is an affordable option, offering a cost-effective alternative to other fuels. According to DCCEEW, Australia imported 0.9% of its energy as LPG in 2022–23, which helps to enhance energy security by diversifying the country’s energy mix and reducing reliance on a single source.

The demand for the Australia liquefied petroleum gas market is growing as it is widely available, providing easy access for consumers in both urban and remote regions. As a major domestic producer, Australia lowers its reliance on imported energy. LPG plays a crucial role in supporting remote communities by providing an essential energy source in off-grid areas. Additionally, LPG is integral to industries such as manufacturing, agriculture, and construction, which fuels economic growth. LPG-powered vehicles also contribute to lowering emissions in Australia’s transportation sector.

Australia Liquefied Petroleum Gas Market Growth

Opportunities in the Australia liquefied petroleum gas market are boosted as LPG provides backup power for renewable energy, stepping in when solar and wind sources are unreliable. Its ease of storage makes it a dependable and portable energy solution. The market also creates jobs in extraction, distribution, retail, and maintenance, boosting local economies. LPG's versatility extends across various transportation uses, and the sector contributes to Australia’s economic growth through trade, exports, and industrial development. In May 2024, Ippon Sanso Holdings Corporation announced that its Australian subsidiary, Supagas Pty Ltd, signed a purchase agreement with Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) to acquire the LPG sales business in Western Australia and Northern Territory from Wesfarmers Kleenheat Gas Pty Ltd, which manages WesCEF's LPG operations.

Domestic and foreign investments in infrastructure and technology are influencing the Australia liquefied petroleum gas market dynamics and trends. LPG provides a stable and reliable energy supply, especially in areas with unreliable grids. Lower fuel taxes in some regions make LPG an affordable option for consumers. Additionally, LPG is vital for heating in colder climates, offering comfort, and acts as an eco-friendly refrigerant, replacing harmful chemicals and reducing overall environmental impact.

Australia Liquefied Petroleum Gas Market Insights

• According to industry reports, LPG consumption in Australia reached 20.8 thousand barrels per day in 2023, emphasising the fuel's crucial role in addressing the country's energy demands. This volume highlights LPG’s importance in residential, industrial, and transport sectors, offering consumers more affordable and environmentally friendly energy options.
• As reported by DCCEEW in 2024, LPG accounted for 0.8% of Australia's total energy production in 2022–23, contributing to energy diversification. Being a cleaner fuel, LPG reduces reliance on traditional fossil fuels like coal and oil, promoting greater sustainability within the nation’s energy landscape. This share reflects LPG's increasing importance in Australia's energy mix.
• According to DCCEEW, in 2022–23, Australia exported 0.8% of its energy in the form of LPG. This export volume strengthens Australia’s position in the global energy market, providing economic benefits through trade and improving energy security. Additionally, LPG exports foster infrastructure development.

Industry News

June 2024

At the Gas Energy Australia National Forum, the "Pathway to Zero Emissions for LPG" session presented findings from a 2023 report, updated with new data. It highlighted eight viable pathways for decarbonising LPG, outlining technological options to provide low-emissions or zero-emissions gas and a potential transition to zero emissions by 2050.

March 2023

Research revealed eight viable pathways for Australia's LPG sector to achieve net-zero and zero emissions by 2045. In Tasmania, LPG supply is set to transition to 100% renewable and net-zero emissions from 2025, with three biodiesel/Sustainable Aviation Fuel plants opening in WA and Queensland, generating 3.5PJ of renewable LPG.

Australia Liquefied Petroleum Gas Market Drivers

Adoption of LPG in Remote and Off-Grid Areas

The development of the Australia liquefied petroleum gas market is driven by LPG's essential role in providing energy to remote and off-grid communities, where access to reliable electricity grids is frequently limited. In these areas, LPG is essential for residential heating, cooking, and power generation. With the expansion of Australia’s infrastructure, the adoption of LPG for off-grid energy solutions has grown due to its portability, ease of storage, and cost-effectiveness. In rural and remote locations, where other energy sources may not be practical, LPG provides a dependable energy option for households and small businesses, improving energy accessibility. According to Gas Energy Australia, the LPG sector contributes USD 3.5 billion to the national economy, supports 2,500 direct jobs, and has over 1,000 applications, including fuel for heating, cooking, lighting, machinery, power generation, automotive fuel, and manufacturing.

Technological Advancements in LPG Storage and Distribution

Technological advancements are a key trend in the Australia liquefied petroleum gas market, transforming LPG storage and distribution systems to improve efficiency and reduce costs.Innovations in tank design, transport logistics, and safety protocols are improving infrastructure. Remote monitoring is being adopted to optimise fuel usage and ensure safety. Additionally, the development of advanced distribution networks enables faster, more reliable delivery to remote areas. These improvements are fueling the growth of the LPG sector, making it a competitive and safe energy option for consumers across Australia. The Bladin Point plant in northern Australia, with a combined annual capacity of 8.9 million metric tons, features dedicated infrastructure for LPG production and export.

Opportunities in the Australia Liquefied Petroleum Gas Market

The growth of the Australia liquefied petroleum gas market is supported by government policies that encourage the use of LPG as part of efforts to reduce greenhouse gas emissions and enhance air quality. State and federal incentives, including rebates, tax breaks, and grants, make LPG-powered appliances and vehicle conversions more affordable. These measures boost LPG adoption among consumers and businesses, fostering market growth. Additionally, government initiatives aimed at sustainability and cleaner energy transitions align with the LPG sector’s expansion, creating a supportive regulatory framework. The Australian Government's LPG Vehicle Scheme further promotes LPG use by offering grants for new vehicles or conversions.

Market Restraints

The Australia liquefied petroleum gas market faces several challenges, including fluctuations in global LPG prices due to supply-demand changes, which affect affordability. Competition from alternative energy sources like renewables, natural gas, and electric vehicles threatens LPG’s market share. Environmental regulations pushing for carbon neutrality and stricter emissions standards could decrease LPG demand.

Infrastructure issues, especially in remote regions, make LPG distribution expensive and complex, while safety concerns regarding storage and handling may hinder its adoption. Limited consumer awareness of LPG's benefits and the environmental impact of its production, particularly fracking, also pose challenges. Finally, global supply chain dependencies and competition from electrification and advancements in energy storage and transport further undermine LPG’s market position.

Australia Liquefied Petroleum Gas Industry Segmentation

“Australia Liquefied Petroleum Gas Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Source

• Associated Gas
• Non-Associated Gas
• Refinery

Market Breakup by Application

• Refinery and Petrochemical
• Industrial
• Agriculture
• Commercial
• Residential
• Transportation
• Others

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Liquefied Petroleum Gas Market Share

Market Analysis by Source

According to the Australia liquefied petroleum gas market analysis, non-associated gas, which is extracted separately from crude oil, offers several advantages. It provides a stable and cleaner energy source, reducing dependence on crude oil and mitigating environmental impacts. Its availability strengthens domestic energy security, supports various industrial applications, and opens export opportunities. The International Energy Agency reports that in 2023, Australia’s total natural gas supply was 1,522,213 TJ, highlighting LPG’s role as a sustainable alternative to traditional fossil fuels. This contributes to the country’s energy mix, supporting key sectors such as residential, industrial, and transportation needs.

In the Australia liquefied petroleum gas market, refinery LPG production plays a vital role by processing crude oil to create LPG as a by-product. This process ensures a steady and reliable LPG supply, which is essential for residential, industrial, and transportation sectors. Refinery-derived LPG also supports the country's economic growth and efficiently meets both domestic and export energy demands. One of the key refineries in Australia is the Geelong Refinery, operated by Viva Energy. Located in Victoria, the refinery produces a variety of fuels, including LPG, petrol, diesel, jet fuel, and bitumen, contributing significantly to Australia's LPG supply.

Market Analysis by Application

According to the Australia liquefied petroleum gas market report, agricultural use plays a pivotal role in driving LPG demand. It is employed for various purposes such as crop drying, greenhouse heating, and powering irrigation systems, offering farmers a reliable and cost-effective energy source. Its clean-burning nature makes it an environmentally friendly choice, reducing emissions in the agricultural sector. As reported by the Department of Agriculture, Fisheries, and Forestry in December 2023, 55% of Australia's land is allocated for agricultural purposes, driving the demand for LPG in key activities like irrigation, crop drying, and machinery operation, further boosting the market.

The growth of the Australia liquefied petroleum gas market is also influenced by its significant benefits in the residential sector. LPG is widely utilised for heating, cooking, and hot water systems, especially in remote and rural areas. Its affordability, portability, and cleaner-burning properties make it a preferred energy source for households. Additionally, LPG helps reduce household energy costs and increases overall efficiency and comfort. In January 2024, the Australian Bureau of Statistics reported a 19.4% increase in the value of new residential construction, reaching USD 7.14 billion, further supporting LPG adoption in residential developments due to its efficiency and lower carbon footprint compared to traditional fuels.

Australia Liquefied Petroleum Gas Market Regional Insights

New South Wales Liquefied Petroleum Gas Market Overview

According to the Australia liquefied petroleum gas industry analysis, the New South Wales LPG market benefits from rising demand in both residential and industrial sectors, driven by infrastructure investments. This enhances energy reliability, supports economic growth, and offers cost-effective, cleaner energy alternatives. In 2024, the ACCC noted that gas imports would be needed to meet winter demand, with the Port Kembla Energy Terminal playing a key role.

Queensland Liquefied Petroleum Gas Market Trends

Queensland’s LPG market thrives due to its strong production capacity, supporting both domestic needs and exports. The region boosts economic development through job creation, infrastructure growth, and providing affordable, cleaner energy solutions. In March 2023, Queensland had the highest dependence on LPG among Australian states, with 607,000 households (more than 27.5% of all homes) using it to meet their energy needs, according to Gas Energy Australia.

Western Australia Liquefied Petroleum Gas Market Dynamics

Western Australia's LPG market benefits from abundant natural gas, ensuring a steady supply. With its robust infrastructure, the region supports both local and export markets, enhancing energy security and reducing dependence on more polluting fuels. In Western Australia, LPG is a popular option, with around 327,000 households – more than 28% of homes – depending on it for their energy needs. This notable figure highlights a steady increase in the adoption of LPG.

Competitive Landscape

The Australia liquefied petroleum gas market key players contribute to the country’s energy security by offering a wide range of energy solutions, including oil, natural gas, and renewable energy sources. Their commitment to sustainable energy practices is evident through investments in low-carbon technologies and cleaner energy alternatives. These companies play an essential role in job creation, supporting thousands of Australians across various sectors, from energy production to research and development.

Key Industry Players

BP Australia Pty Limited: BP Australia Pty Limited, established in 1919, is a subsidiary of BP (British Petroleum), headquartered in Melbourne. The company is a major player in Australia's energy sector, focusing on oil and gas exploration, refining, and distribution. BP provides sustainable energy solutions and contributes significantly to the Australian economy.

Shell Australia Pty Limited: Shell Australia Pty Limited, founded in 1901, is a subsidiary of Shell, headquartered in Melbourne. The company operates across oil, gas, and renewable energy sectors. Shell provides a wide range of energy solutions, including natural gas, liquefied petroleum gas (LPG), and low-carbon technologies in Australia.

BOC Australia: BOC Australia, established in 1886 and headquartered in Sydney, is a leading provider of industrial gases and related services. A member of the Linde Group, BOC offers a wide range of products and solutions in areas such as healthcare, manufacturing, and energy, focusing on safety and sustainability.

Elgas Ltd.: Elgas Ltd., established in 1983 and headquartered in Sydney, is a leading supplier of liquefied petroleum gas (LPG) in Australia. As a subsidiary of the global energy company, Metgasco Limited, Elgas offers LPG for residential, commercial, and industrial use, playing a vital role in Australia's energy landscape.

Another key player in the Australia liquefied petroleum gas market report is Coregas Pty Ltd, among others.

Recent Development

February 2024

Ampol Ltd announced plans to upgrade its Lytton refinery in Queensland to meet new gasoline production standards for both regular and premium grades. The project, estimated to cost AUD 250 million, is expected to be commissioned by late 2025. Ampol also forecasted a 10% rise in capital expenditures for 2024.

March 2023

Frontier Economics, commissioned by Gas Energy Australia (GEA) and the Australian Gas Industry Trust (AGIT), conducted a study on Australia's LPG sector’s pathway to net zero emissions. The report outlined technological options for delivering low or zero-emissions gas and proposed a transition plan to achieve zero-emissions by 2050.