(Photo courtesy: MarineInsight.com)
New Delhi: In a landmark energy trade development, India has finalized its first structured LPG import contract with the United States, marking a major shift in the country’s fuel sourcing strategy and strengthening Indo-US trade ties. State-run oil companies — IndianOil, BPCL and HPCL — have signed a one-year agreement to procure around 2.2 million tonnes of LPG from the US Gulf Coast for the contract year 2026. The deal represents nearly 10% of India’s annual LPG imports and officially opens one of the world’s fastest-growing LPG markets to US suppliers.
Announcing the decision, petroleum and natural gas minister Hardeep Singh Puri described the development as historic and said that the pricing of the cargo will be benchmarked to Mount Belvieu. He noted that India has been working to secure affordable and reliable LPG supplies by diversifying sourcing options globally.
The move is expected to contribute to balancing India’s trade with the United States. India recorded a trade surplus of $42 billion with the US in the last financial year, exporting goods worth $86 billion. Data has also shown a rise in US crude shipments to India, reaching the highest level since March 2021.
The LPG contract follows detailed discussions between IndianOil, BPCL and HPCL executives and major American producers during meetings held in the US from 21 to 24 July 2025. According to the government, the agreement supports India’s long-term energy security while reinforcing its strategy of diversifying supply chains amid global price fluctuations.
The minister emphasized that PSU oil companies have ensured that LPG continues to be provided to Indian households at some of the lowest global prices. Even when international LPG prices surged by over 60% last year, Ujjwala scheme beneficiaries continued to receive cylinders for ₹500-550, although the actual cost exceeded ₹1,100.
To shield households, particularly women, from the burden of rising global fuel costs, the central government absorbed an expenditure of more than ₹40,000 crore in the previous year.
The new US sourcing arrangement for 2026 is being viewed as a critical step toward securing consistent fuel supplies at competitive prices while meeting India’s rising LPG demand. With more than half of India’s cooking gas requirement dependent on imports, the deal is expected to support both domestic affordability and national energy stability as consumption expands in urban and rural regions alike.