Kuala lumpur: Malaysia’s average liquefied petroleum gas (LPG) demand growth rate is projected to slow to 0.8 per cent annually between 2025 and 2034, said BMI, a Fitch Solutions company. In a note today, BMI highlighted that the country’s LPG consumption faces challenges from the increasing use of natural gas in the commercial and industrial sectors.

According to BERNAMA News Agency, residential and commercial LPG demand is increasingly competing with piped natural gas, electricity, and liquefied natural gas. BMI noted that improvements in pipeline gas networks and electrification are affecting LPG consumption in these sectors. In the commercial sector, LPG use has decreased as city-gas network expansions replace LPG with natural gas.

Residential demand remains relatively stable, but growth has slowed since 2023 due to gradual policy and commercial pressure on households to switch to natural gas for cooking. The research firm pointed out that the rapid penetration of natural gas into commercial and industrial energy use, supported by continued investment in city-gas networks, is expected to have a more pronounced impact on LPG consumption in the medium to long term.

BMI also mentioned that the government’s ongoing expansion of natural gas transmission and distribution infrastructure will exert a lasting impact on long-term LPG use. Meanwhile, BMI anticipates that Malaysia’s LPG exports will grow marginally, aligning with potential increases in non-refinery supplies.

Long-term export growth prospects are bolstered by a structural slowdown in domestic consumption and the resulting surplus available for export. LPG exports from liquefied natural gas plants are expected to rise marginally over the coming years, broadly in line with incremental upstream natural gas and liquefied natural gas output.