Key Points:
- India LPG imports strengthened with a one-year deal to import 2.2 million tonnes of LPG from the US.
- The deal diversifies supply and boosts energy security.
- It ensures stable LPG for rising household and commercial demand.
Indian public sector oil companies have signed a one-year agreement to import 2.2 million tonnes per annum of liquefied petroleum gas from the US Gulf Coast for the 2026 contract year. The Ministry of Petroleum and Natural Gas announced the deal on Nov. 17, noting that the supply volume represents close to 10% of India LPG imports.
Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said the purchase will use the Mount Belvieu benchmark, a key pricing reference point for US LPG. He said officials from Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited visited the United States over the past few months to hold discussions with major producers. Those negotiations concluded with the signing of the new contract.
Speaking about the agreement, Puri said the deal marks the first structured contract for US LPG intended specifically for the Indian market. He said the arrangement supports the government’s efforts to secure stable and affordable LPG supplies and diversify India LPG imports.
Contract details outlined
The ministry said the contract ensures a steady flow of LPG from the US Gulf Coast throughout 2026. Officials involved in the negotiations visited production facilities and met suppliers to assess export capabilities and pricing structures. The companies finalized terms after reviewing commercial and logistical considerations.
In a post shared on X, Puri said the Indian LPG market—one of the largest and fastest growing in the world—will now be more closely linked with US suppliers. He noted that expanding sourcing options helps strengthen energy security and reduces reliance on traditional supply regions.
Broader context for imports
India LPG imports account for a significant share of the country’s LPG needs to meet rising household and commercial consumption. Demand has increased over the past decade due to growth in the Pradhan Mantri Ujjwala Yojana, expansion of bottling infrastructure, and wider rural adoption of clean cooking fuel.
Mount Belvieu pricing has become an important reference point for global LPG trade. Using it as a benchmark aligns Indian procurement with international market practices and provides greater transparency in pricing.
Officials said the new contract complements ongoing efforts to diversify supply partners. India has historically imported LPG from the Middle East, but US exports have expanded as production from shale fields increased. The deal reflects a shift toward a broader mix of suppliers to reduce exposure to regional disruptions.
Government’s energy strategy
The ministry said the agreement supports the government’s objective of ensuring reliable fuel access for consumers. LPG consumption has remained high due to urban population growth and rising incomes, placing additional pressure on domestic production.
Puri said continued diversification of sourcing is part of a long-term strategy to maintain affordability and supply stability. He added that strengthening ties with US producers creates another channel for consistent India LPG imports.
The companies are expected to begin receiving shipments from the US Gulf Coast at the start of the 2026 contract year. Further procurement decisions will depend on market conditions, domestic demand, and global price trends.
Visit Business Viewpoint Magazine For The Most Recent Information.
