India has taken a step in the matter of LPG imports. Petroleum Minister Hardeep Singh Puri announced that India has finalized a major deal with the United States for 2.2 MTPA (Million Tonnes Per Annum) of LPG, which will account for approximately 10% of India’s total annual LPG imports. This deal, which is for 2026, marks the first time that India has signed a structured LPG contract with a US Gulf Coast source. This is expected to bring stability to LPG supply and prices in India. Following this announcement, shares of Oil Marketing Companies (OMCs) like HPCL, BPCL, and IOC surged by up to 4%.
On Monday, Petroleum Minister Hardeep Singh Puri made the historic announcement on social media, stating that India—one of the world’s largest and fastest-growing LPG markets—will now import LPG directly from the United States on a large scale for the first time.
Puri’s post mentioned that Indian PSU oil companies—IOC, BPCL, and HPCL—had successfully finalized a major one-year deal. Under this deal, India will import 2.2 MTPA of LPG from the US by 2026. This volume accounts for about 10% of India’s annual LPG imports, making it the largest US-to-India LPG supply deal in history.
Key Highlights of the Deal:
- This is the first structured LPG contract between India and the US.
- The price of LPG will be determined based on the Mount Belvieu benchmark, which is a key reference point in global LPG pricing.
- Indian PSU officials held discussions with several major LPG companies in the US over the past few months, and this deal is the result of those talks.
This deal shows that India is continuously diversifying its LPG sourcing to secure and make its energy supply more affordable.
Government Subsidy and Consumer Relief:
Hardeep Singh Puri also mentioned in his post that although international LPG prices rose by up to 60% last year, the government ensured that women beneficiaries of the Ujjwala Scheme were protected from the price hike. While international LPG prices surged past ₹1100 per cylinder, Ujjwala customers continued to receive cylinders at ₹500-550. The government took on a burden of ₹40,000 crore to shield women and low-income families from price increases.
What Will Change for India’s LPG Market?
- Stable Supply: With long-term supplies from the US Gulf Coast, India’s dependence on the international market will be balanced.
- Price Relief: The Mount Belvieu benchmark pricing will bring more transparency and potentially better price stability in the long run.
- Stronger Energy Security: India will no longer be solely dependent on the Middle East for LPG sourcing.
- Benefits for Consumers: Programs like the Ujjwala Scheme will continue to ensure affordable LPG supply.
Impact on the Energy Sector:
- Domestic LPG market competition could rise.
- PSU oil companies will strengthen their international strategies.
- As LPG demand increases in the coming years, the US will emerge as a reliable partner.
The India-US LPG deal is not just a business agreement but a strategic step tied to energy security, supply diversification, and consumer interests. This move will strengthen India’s LPG market for the long term and make the country more influential in the global energy market.
