In the first structured contract, India’s state-owned oil companies have concluded a one-year deal for imports of 2.2 million tonne of liquefied petroleum gas (LPG) from the US in 2026, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said on Monday.
The imports, accounting for close to 10% of the country’s annual imports, will be sourced from the US Gulf Coast. The deal follows the commitment expressed by India to scale up energy imports from the US, with which the country is negotiating a bilateral trade agreement (BTA), even as most Indian goods face an additional tariff of 50% in the US over the most favoured nation rates.
“This purchase is based on using Mount Belvieu as the benchmark for LPG purchases and a team of our officials from IndianOil, BPCL, and HPCL had visited the US and engaged in discussions with major US producers over the last few months, which have been concluded now,” the minister said in a post on X.
The country has been diversifying its sourcing of LPG in its attempt to provide secure and affordable supplies to the consumers. The country has been seeking trade arrangements with the US in the energy sector since Washington imposed high tariffs and a penalty on imports from India for buying Russian oil.
“India is already a growing offtaker of the US LNG, with long-term contracts in place with exporters like Cheniere and Freeport. While US LNG currently holds a modest share of India’s gas mix, expanding volumes or prepaying for future offtake would signal strong commercial alignment — especially as new US liquefaction projects seek demand security,” Sumit Ritolia, lead research analyst, refining & modeling, Kpler, had told FE.
The US is already India’s second-largest LNG supplier, driven by abundant supply and competitive long-term contracts, as per report by Rubix Data Sciences. Between FY20 and FY25, India’s LNG imports from the US grew at a 30% CAGR (compound annual growth rate) by value, with its share in LNG imports rising from 7% to 17%.
Crude oil imports from the US have also seen a rise in October reaching 568,000 barrels per day, touching their highest level since March 2021, and are expected to average 450,000-500,000 bpd in November, compared with a year-to-date average of around 300,000 bpd, Kpler had said.
In August, the Union Cabinet approved compensation amounting to Rs 30,000 crore to the three public sector oil marketing companies for the under-recoveries incurred on sale of domestic LPG.
Domestic LPG cylinders are supplied at regulated prices to consumers by the state-run OMCs including IOCL, BPCL, and HPCL. The international prices of LPG remained at high levels during 2024-25.
Puri noted that even as global prices soared by over 60% last year, the government ensured that Ujjwala consumers continue to receive LPG cylinders at just Rs 500-550 against its actual cost of over Rs 1,100. The government incurred the cost of over Rs 40,000 crore last year on this account.