Due to the switch from pricey natural gas, commercial users utilised about a fifth more LPG in the first nine months of this fiscal year. According to the oil ministry, India consumed 21,256 thousand metric tonnes of LPG overall between April and December 2022, an increase of 1.8% from the previous year. Although sales to commercial users increased significantly, household consumption, which makes up around 89% of overall consumption, only increased by 0.3% year over year. While bulk LPG had a 12% year-over-year growth, the amount of packaged LPG sold to businesses climbed by 18.4%. After gas prices surged to record highs in 2022,
businesses like factories, restaurants, and stores that frequently use natural gas started looking for alternatives. "Many factories and stores found LPG to be useful. LPG is simple to obtain and use, and its prices have been falling "a company executive who wished to remain anonymous remarked.
Since May 2022, the cost of packed LPG cylinders for commercial usage has decreased, with prices in India falling by 25% in the seven months leading up to December. The price of liquefied natural gas (LNG) on the Asian spot market is also significantly lower than it was in August, although it is still fairly expensive, trading at about $18 per mmBtu. The cost of LNG obtained through long-term contracts, where prices are based on oil, is roughly $12 per mmBtu, which is significantly more expensive than the recent average.
LPG imports have increased dramatically in recent months. According to energy cargo tracker Vortexa, average imports were 15% higher in the three months leading up to January than in the previous three months. According to an industry executive, the increase in imports was primarily caused by seasonality because winter requires more energy for the same task. According to him, another factor was the widespread move by customers from natural gas to LPG. According to the executive, LPG imports have predominantly surged at Western ports because of their proximity to numerous gas-consuming companies.
