Post by : Badri Ariffin

In a landmark development poised to transform India’s energy dynamics, the country has established its first structured, long-term deal to import liquefied petroleum gas (LPG) from the United States. This contract, effective for one year starting in 2026, will facilitate the importation of approximately 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast, constituting nearly 10% of India’s total yearly imports.

Union Minister of Petroleum and Natural Gas, Hardeep Singh Puri, lauded the agreement as “a substantial leap” towards securing affordable and dependable LPG supplies for households across India. This contract is indexed to Mont Belvieu, the premier pricing benchmark for LPG in the United States, ensuring clarity and compatibility with global market standards.

Enhancing Supply Diversity for Energy Security

As the globe's second-largest consumer of LPG, India currently relies on West Asian nations for over half of its imports. The swift adoption of LPG in households, spurred by programs like the government’s Ujjwala Yojana, has driven up demand, emphasizing the necessity for diversified supply channels. By attracting US imports, India aims to mitigate supply-chain vulnerabilities, stabilize pricing, and protect consumers from fluctuations in global markets.

Despite a more than 60% rise in LPG prices globally last year, the Indian government sustained Ujjwala beneficiaries’ cylinder prices at Rs 500–550, absorbing over Rs 40,000 crore in subsidies. This agreement with the US is anticipated to bolster these efforts by ensuring reliable household supplies while enhancing India’s energy collaboration with global partners.

Towards Sustainable Energy Partnerships

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) navigated the negotiations with US suppliers after extensive discussions. Officials highlight that this pivotal agreement could lay the foundation for extended supply contracts and fortify energy ties between India and the US in the future.

With the LPG market in India expanding, particularly in rural regions, ensuring a diverse supply base remains a strategic priority. By securing structured imports from the US, India is not just enhancing its energy security but also diminishing dependence on a single region, leading to more predictable pricing for millions of households nationwide.

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