Prime Highlight
- India has finalized its first structured, long-term agreement to import LPG from the US, marking a strategic shift in diversifying energy sources.
- Petroleum Minister Hardeep Singh Puri called the deal a “historic first,” emphasizing its role in strengthening India’s energy security and affordability goals.
Key Facts
- The one-year contract secures 2 MTPA of LPGfrom the US Gulf Coast for 2026, equivalent to nearly 10% of India’s annual LPG imports.
- The deal is priced against the Mont Belvieu benchmarkand was negotiated by IOC, BPCL, and HPCL after multiple rounds of discussions with major US producers.
Background
India has signed its first structured and long-term agreement to import liquefied petroleum gas (LPG) from the United States, marking a major step in strengthening the country’s energy security. Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday that state-run oil marketing companies have finalised a one-year contract to purchase about 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast for 2026.
The volume accounts for nearly 10% of India’s yearly LPG imports and represents a significant shift in sourcing strategy. So far, India has mostly depended on West Asian suppliers for its LPG. Puri described the agreement as a “historic first,” adding that the deal will support the government’s goal of providing secure and affordable LPG for Indian households.
The contract is India’s first structured LPG purchase agreement with the US and is priced against Mont Belvieu, the main American benchmark for LPG. Teams from Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) held multiple rounds of discussions with major US producers before finalising the terms.
India is the world’s second-largest user of LPG because of rising household usage and the continued expansion of the Ujjwala Yojana scheme. Since the country imports more than half of its LPG, the government is working to buy LPG from different regions to avoid relying on one source and to protect consumers from sudden price changes.
Puri noted that despite global LPG prices rising over 60% last year, Ujjwala families paid only ₹500–550 per cylinder while actual costs crossed ₹1,100. The government absorbed the rest, spending more than ₹40,000 crore.
The US deal is expected to strengthen India–US energy ties and may open the door for longer-term supply contracts. The government says that as LPG demand grows, expanding supply sources will remain central to India’s energy strategy.
