Union Minister for Petroleum and Natural Gas, Shri Hardeep Singh Puri, announced today that India’s state-owned oil marketing companies have finalised a landmark one-year agreement to import 2.2 million tonnes of liquefied petroleum gas (LPG) per year from the United States Gulf Coast, beginning in the 2026 contract year.
In a series of posts on X, Minister Puri described the deal as “historic” and the “first structured contract of US LPG for the Indian market”. The agreement has been signed by Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) with leading American suppliers.“This deal will cover nearly 10% of India’s total LPG imports and marks a significant step towards diversifying our sources of supply amid rising geopolitical uncertainties,” the Minister stated.Key highlights of the announcement:
- Volume: 2.2 million tonnes per annum (approximately 180,000 tonnes per month)
- Source: United States Gulf Coast, priced against the internationally recognised Mont Belvieu benchmark
- Duration: One-year firm contract for the calendar year 2026, with potential for extension
- Significance: First time Indian PSUs have entered into a structured, term-based contract for US-origin LPG
India currently consumes over 28 million tonnes of LPG annually, making it the world’s largest and fastest-growing market for the clean cooking fuel. With domestic production meeting only about 60% of demand, the country imports the balance primarily from the Middle East. The new US supplies will help reduce dependence on traditional sources at a time when regional tensions continue to pose risks to maritime trade routes.Minister Puri emphasised that the agreement aligns with ongoing bilateral energy and trade discussions between India and the United States, especially ahead of the incoming Trump administration.“Strengthening energy ties with the US is a win-win. It enhances our energy security while providing American producers a stable, large-volume market,” he added.The development comes as the government continues to shield consumers from global price volatility. Under the Pradhan Mantri Ujjwala Yojana and other subsidy schemes, eligible households continue to receive LPG cylinders at highly subsidised rates despite international prices remaining elevated.Industry sources indicate that the successful conclusion of this contract could pave the way for longer-term arrangements in the coming years, further cementing the US as a key supplier in India’s diversified energy import basket.With this deal, India has taken another firm step towards ensuring uninterrupted and affordable access to clean cooking fuel for millions of households across the country.
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