Russia Liquefied Petroleum Gas (LPG) Market Research Report, 2029

Russia has a long history with LPG, initially using it mostly for residential heating. However, significant regulatory changes in the 2000s fueled an increase in autogas use due to its affordability. Today, Russia is the world's second-largest autogas market, with LPG profoundly embedded in the country's transportation culture. When compared to other countries in the region, Russia excels in numerous crucial areas. For starters, it has a significantly larger Liquefied Petroleum Gas (LPG) market than the majority of its surrounding neighbours. This implies strong demand in the country, as well as room for additional growth. Furthermore, Russia has a greater autogas culture, with LPG usage for mobility becoming increasingly prevalent. LPG's cultural acceptance as a car fuel contributes to its regional market domination. Pricing and segmentation are critical components of the Russian Liquefied Petroleum Gas (LPG) market environment. Domestic LPG prices remain lower than worldwide rates, which are heavily impacted by export netback values. Despite this, retail prices, including VAT, remain competitive, frequently undercutting gasoline and diesel costs. However, determining typical pricing information is difficult due to market swings, emphasising the industry's dynamic nature. In terms of companies and new entrants, established players like Rosneft dominate the Russian Liquefied Petroleum Gas (LPG) market. However, there are opportunities for newcomers, particularly in areas such as distribution and logistics. Building a robust network to cater to rising demand, especially in remote regions, presents a promising avenue. According to the research report “Russia Liquefied Petroleum Gas (LPG) Market Research Report, 2029," published by Actual Market Research, the Russia Liquefied Petroleum Gas (LPG) market is projected to add more than USD 3.50 Billion from 2024 to 2029. Several fundamental drivers are propelling this increasing trend. For starters, LPG continues to have a significant pricing advantage over gasoline and diesel, making it an appealing fuel alternative for consumers. Furthermore, because of the country's reliance on exports, government support, rather than direct incentives, results in comparatively low domestic prices. Furthermore, developments in the petrochemical industry, which is heavily reliant on LPG feedstock, are expected to boost market demand even further. Despite its popularity, LPG use has some challenges. Infrastructure limits are a key barrier, especially in rural places where the distribution network for filling stations may struggle to keep up with rising demand. Furthermore, vehicle conversion costs pose an initial investment hurdle for consumers. However, the long-term fuel savings given by LPG generally outweigh the upfront costs. The Russian Liquefied Petroleum Gas (LPG) market has a deregulated retail pricing system, including an 18% Value-Added Tax (VAT). Export customs duty rates are affected by Argus price evaluations, a reputable source of contract and border pricing. This regulatory structure provides a backdrop of stability and openness for market participants, but with some tax implications that affect the industry environment.

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LPG is utilised across various applications, including domestic, residential, commercial, agricultural, industrial, transportation, refinery, and chemical sectors. In domestic and residential settings, LPG serves as a versatile energy source for heating, cooking, and other household needs, while in commercial applications, it is commonly employed for heating and powering various equipment and appliances. Agriculture relies on LPG for activities such as crop drying, pest control, and greenhouse heating. In industrial settings, LPG finds extensive use in manufacturing processes, space heating, and as a fuel for machinery and equipment. The transportation sector utilises LPG as an alternative fuel for vehicles, offering a cleaner-burning option compared to traditional gasoline or diesel. Within refineries, LPG is produced as a byproduct of the refining process, extracted through techniques such as crude oil distillation, catalytic cracking, and hydrocracking. Additionally, LPG can be sourced from associated gas, which is natural gas co-extracted with crude oil, or from non-associated gas reserves, where it is found independently of crude oil. This diversity in sources ensures a steady supply of LPG for various applications, supporting its widespread use across different sectors while also offering flexibility and resilience in the face of changing market conditions and demands. Russia is a substantial producer of LPG, primarily from natural gas processing. This abundance of raw materials provides a continuous supply for both home and foreign markets. The country's reliance on natural gas processing for LPG production gives it a competitive advantage in the worldwide market, as the supply chain is stable and reliable. Despite LPG's known pricing advantage and cultural acceptance in Russia, targeted promotion and marketing campaigns remain viable. While substantial promotion may be unnecessary, efforts could be directed at raising knowledge about safe LPG handling and storage methods. Educating consumers about the environmental benefits of LPG, notably its role in lowering emissions as compared to traditional fuels, might also be highlighted. By emphasising these points, continued expansion and use of LPG can be fostered in a variety of industries. The COVID-19 epidemic is expected to have had a mixed influence on Russia's Liquefied Petroleum Gas (LPG) market. Initially, there may have been a drop in demand due to decreased commercial activity caused by lockdown measures. However, there is potential for a comeback in demand following the epidemic, particularly with an increased emphasis on personal vehicles as people seek other modes of mobility. This could lead to an increase in autogas demand, cementing Russia's position as a major participant in the Liquefied Petroleum Gas (LPG) market. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Liquefied Petroleum Gas (LPG) market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation

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Kripa Shah

Senior Analyst

By Application • Domestic • Agriculture • Industrial • Transportation • Refinery • Chemical By Source • Refinery • Associated Gas • Non-associated Gas The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

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Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Liquefied Petroleum Gas (LPG) industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.