domestic end users to switch to the fuel. Our research uncovered that entities such as LPG suppliers can approach Eskom and other independent power producers to offer them LPG as a backup energy source instead of diesel / petrol. This could create significant short-term opportunity for existing market participants and raise potential for medium- and longer-term demand with power producers as a priority end-user sector.

Local consumption is expected to continue to outstrip supply and this in its own should encourage both existing and potential industry participants to invest in capacity expansion; particularly during the longer-term where the gap between supply and demand is expected to exceed 100 thousand tonnes per annum. In addition, imports of LPG into SA have grown at a CAGR of 44% between 2015 and 2018. Based on forecasts provided in the research, for the years 2020 to 2024, it is anticipated that imports will continue to trend upwards as current suppliers will not be able to sustain the increase in industry, commercial and domestic end-user demand. Our research reveals that there is only one major capacity expansion project being rolled out with an expected commission date of June 2020. This intervention in, our opinion will not plug the growing demand gap during the forecast.”

Birguid forecasts modest revenue growth for the sector between 2020 and 2024. However, more income can be generated by the sector depending on industry participants’ risk appetite. For instance, targeting provinces where uptake is currently low could accelerate revenue growth for existing participants. Market entrants on the other hand are expected to benefit from downstream opportunities through the improvement of distribution models, particularly last mile delivery.

Our research uncovers the latest market trends and future potential of the liquefied petroleum gas (LPG) market in South Africa with the aim of enabling market participants and investors to identify and understand competitive threats and make informed decisions for the future.