Residential
Residential
At the sector level, total consumption of oil products for residential and commercial use is expected to remain largely unchanged, but this masks growing LPG demand and declining gasoil consumption.
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Residential - Summary
Gasoil as a heating fuel is anticipated to decline in advanced economies due to the increasing availability of sustainable solutions. Whereas in developing economies, increasing use of LPG in place of solid fuels is expected to support economic activity and improved health outcomes.
At the sector level, total consumption of oil products for residential and commercial use is expected to remain largely unchanged, but this masks the likelihood of growing LPG demand and declining gasoil consumption.
Global consumption of LPG as a fuel source could rise by 1.7 million bpd by 2040. On that basis, by the end of the outlook, LPG would represent 70% of the sector’s oil product demand – up from around 50% today. Gasoil consumption, in contrast, is anticipated to fall by over 1 million bpd compared to today, with just under 3 million bpd of remaining demand by 2040.
Growth in demand for LPG will likely offset decline in gasoil on a global basis.
Shaded section indicates timing of COVID-19 pandemic
Residential - Key drivers
In 2040, Asia is likely to remain the largest user of oil for residential and commercial use, representing over half of sectoral demand. Africa is expected to rise in importance – by the end of the outlook, it could double to represent 11% of global consumption.
Gasoil
Solar panels and heat pumps are now available as a viable option for domestic use. In tandem, thermal efficiency in buildings has improved with advances in insulation, and building design. As a result, in advanced economies the use of gasoil as a heating fuel is expected to decline significantly over the next fifteen years.
Governments could accelerate the pace of transition through more stringent building standards plus greater use of incentives and subsidies (although gains are limited by the small remaining size of the market).
LPG
In developing markets, growing rural and urban populations are increasing demand for fuel to support domestic activities. Even in urban areas, power networks are often inadequate, leading consumers to source alternative fuels. LPG, provides a flexible and accessible source of fuel for domestic and small-scale commercial activities (such as lighting and cooking).
In both urban and rural areas, where LPG replaces the use of highly polluting solid fuels, it has the potential to improve health outcomes for the 2+ billion people across middle- and low-income countries who continue to be exposed to household air pollution through cooking with these fuels.
Demand for residential fuels is expected to shift to developing economies.
Asia and Africa are anticipated to lead demand for residential and commercial use.
Change in million bpd
Residential - Case study
Vitol has supported clean cooking, through investment in LPG infrastructure and clean cooking carbon projects, for the last 20 years, enabling access to clean cooking for over 10 million households.
This was further bolstered in May 2024 when Vitol and Vivo Energy announced their intention to invest a further $550+ million by 2030 in LPG infrastructure – from marine terminals to the high-quality cylinders required for the safe distribution of LPG – and investment in clean cooking carbon projects.
Investment and policies encouraging the adoption of LPG could give rise to regional divergences, with most rapid adoption occurring where investment in LPG infrastructure is greatest.
Over the next 15 years, the high cost and long timeframes involved in investment in power grid infrastructure and natural gas networks will likely mean that many urban and rural households in developing economies will remain off-grid. LPG presents the key transitional solution which can be adopted widely in developing economies today.
Even as new solutions for residential and commercial use become available, demand is expected to persist, as established LPG infrastructure will ensure it remains a competitive fuel option for many household activities.
The Long term oil demand outlook report includes Vitol’s views on and forecasts of both historical levels and projections of future energy demand, supply, and trends based upon internal data and analyses as well as publicly available information from a variety of external sources. The report contains forward looking statements, including projections, targets, expectations, estimates and assumptions of future behaviours. Actual future conditions and results (including energy demand, energy supply, the growth of energy demand and supply, the impact of new technologies, the relative mix of energy across sources, economic sectors and geographic regions, imports and exports of energy, emissions and plans to reduce emissions) could differ materially due to changes in economic conditions, the ability to scale new technologies on a cost-effective basis, unexpected technological developments, the development of new supply sources, changes in law or government policy, political events, demographic changes, trade patterns, the development and enforcement of global, regional or national mandates, changes in consumer preferences, and various other factors. The report was published in February 2025. Vitol assumes no duty to update these statements or materials as of any future date, and neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of this material as of any future date. This material is not to be used or reproduced without the permission of Vitol. All rights reserved.