LP Gas stands for "Liquefied Petroleum Gas". It is the term widely used to describe a family of light hydrocarbons called "gas liquids". The most prominent members of this family are propane (C3H8) and butane (C4H10). Other members of the LP Gas family are ethane and pentane. These latter fuels have their own distinctive markets and are not further discussed here.

The term "liquefied gas" may seem a contradiction in terms since all things in nature are either a liquid, a solid or a gas. Yet, it is the unique character of LP Gas that makes it such a popular and widely used fuel. LP Gas at normal temperature and pressure is a gas. It changes to a liquid when subjected to modest pressure or cooling. In liquid form the tank pressure is about twice the pressure in a normal truck tire.

The reason LP Gas is liquefied is to make it easy and efficient to transport and store. One unit of liquid has the same energy content as 270 units of gas. If left as a gas the container to hold the fuel would be 270 times larger than what is required as a liquid. In other words, LP Gas has density (compactness) for storage and transportation, yet all the benefits of a clean vaporous fuel when used at the burner tip or engine.

LP Gas usually consists of a mixture of propane and butane for standard heating and cooking purposes. Propane starts vaporising above -45°C, so it is more versatile for general use. Butane starts vaporising above -2°C and requires a propane/butane mixture in cold environments as it will not vaporise as readily as propane. LP Gas can also be used in specialised applications that require a more rigorous specification. Such applications include food processing, aerosol propellants and automotive fuel (autogas).

LP Gas is a derivative of two large energy industries: natural gas processing and crude oil refining.

When natural gas is drawn from the earth, it is a mixture of several gases and liquids. Methane, which is sold by gas utilities as "natural gas" constitutes about 90 percent of this mixture. Of the remaining 10 percent, 5 percent is propane and 5 percent is other gases such as butane and ethane. Before natural gas can be transported or used, the LP Gases (which are slightly heavier than methane, the major component of natural gas) are separated out. Depending on the "wetness" of a producing gas field, gas liquids generally contain 1%-3% of the unprocessed gas stream. Some LP Gases are also trapped in crude oil. In order to stabilise the crude oil for pipeline or tanker distribution, these "associated" or "natural gases" are further processed into LP Gas. Worldwide, gas processing is a source of approximately 60% of LP Gas produced.

In crude oil refining the LP Gases are the first products produced on the way to making the heavier fuels such as diesel, jet fuel, fuel oil, and gasoline. Roughly 3% of a typical barrel of crude oil is refined into LP Gas although as much as 40% of a barrel could be converted into LP Gas. Worldwide, crude oil refining is the source for the other roughly 40% of LP Gas supplies although the ratio between gas processing and refining varies among regions.

LP Gas production from these sources is a natural derivative. That means production of LP Gas is assured since the primary motive for gas processors and refiners is to produce fuels other than LP Gas but first the LP Gases are produced. Although tied to the production of natural gas and crude oil, LP Gas has its own distinct marketing advantages and can perform nearly every fuel function of the primary fuels from which it is derived.