German LPG demand recovers in 2025 as prices fall

The heating sector drove the recovery in consumption with help from a post-pandemic motorhome boom, writes Waldemar Jaszczyk

German LPG demand grew in 2025 for the first time in three years as lower prices encouraged consumers to abandon energy-saving measures introduced after Russia's full-scale invasion of Ukraine in early 2022.

Domestic consumption — excluding petrochemical feedstock use — among members of LPG association DVFG rose by more than 9pc on the year to 1.3mn t in 2025, after a 3pc contraction the previous year, the association says. The heating sector drove the recovery, with use increasing by nearly 10pc to 868,000t. Lower LPG prices boosted demand after years of conservation prompted by the start of the Ukraine war, which pushed energy prices sharply higher across Europe.

Northwest European LPG prices succumbed to supply pressure last year as the US-China trade war pushed record volumes of US LPG to Europe. The propane fca Amsterdam-Rotterdam-Antwerp (ARA) assessment for 45t cargoes fell by more than 30pc from 2022 to an average $602.50/t. Railcar premiums to the large cargo cif ARA benchmark almost halved to $117.50/t after the market accommodated additional eastern European demand created by the EU embargo on Russian LPG.

Heating demand also benefited from the gradual dismantling of Germany's natural gas distribution network, with households often switching to LPG as an off-grid fuel, DVFG says.

Industrial consumption rose by 19pc on the year to 165,000t following a recovery in economic activity after a prolonged slump. Germany's economy returned to growth last year after two years of recession, expanding by 0.2pc, according to the federal statistical office. The downturn had weighed heavily on industry, particularly chemicals, causing a 6pc contraction in LPG use during 2023-24.

Cylinder LPG consumption rose by 5pc to 155,000t, driven by a post-pandemic motorhome market boom. Motorhome numbers more than doubled from 2020, exceeding 1mn units last year. The gains more than offset a 22pc fall in autogas use to 69,000t as LPG vehicles were hit by wider weakness in combustion engine sales. Germany's autogas fleet shrank by over 5pc to 284,500, as new vehicle registrations fell by 12pc to 12,000, according to the federal motor transport authority.

The surge in international LPG benchmarks since the US-Iran war began could push the German market off its recovery path this year, even in the wake of the recent peace deal. ARA railcar prices hit a four-year high of $1,078/t fca in March after low stocks and rising costs for US imports pushed break-bulk terminals at the hub to raise spot offers. Inland buyers rapidly retreated in the face of higher offers, bringing the spot market to a standstill. Values eased on rising refinery supply and milder weather to $602/t by mid-June, but were still $70/t higher than a year ago.

Bio beginnings

DVFG disclosed domestic renewable liquid gas (RLG) sales for the first time at 4,500t in 2025 — around 0.04pc of the total. Uptake was limited by steep premiums to fossil-fuel LPG, the association says, although the gap has started to narrow. The biopropane fca ARA premium to large cargoes dropped to about $800/t in June from $921/t in 2025 and $1,040/t in 2024, as voluntary demand failed to keep up with rising availability from higher hydrotreated vegetable oil and sustainable aviation fuel output.

Germany's newly proposed buildings modernisation act (GMG) could boost RLG demand. The draft, which aims to take effect on 1 July, rolls back key provisions of the 2023 building energy act in favour of a technology-neutral approach by shifting obligations from consumers to fuel distributors. But the policy shift could still be reversed locally because the draft allows federal states to impose stricter climate measures beyond GMG. Hamburg, for example, moved in May to seek stronger powers over heating laws to achieve carbon neutrality by 2040.