India-US inks major LPG import deal; to purchase 2.2 million tons per year by 2026

Announcing the deal, Oil Minister Hardeep Singh Puri said on Monday that one of the world’s largest and fastest growing liquefied petroleum gas markets is opening up to the US.

This is one of the first in a series of deals through which India aims to increase its purchases of energy products from the US. India’s annual purchases of energy products from Washington amount to about $12 to $13 billion annually, and New Delhi wants to supplement this with another $12 to $13 billion.

Announcing the deal, Oil Minister Hardeep Singh Puri said on Monday that one of the world’s largest and fastest growing liquefied petroleum gas (LPG) markets is opening up to the US.

“In our commitment to provide safe, affordable LPG supplies to the people of India, we have diversified our LPG sourcing. In a significant development, Indian PSU oil companies have successfully entered into a one-year agreement to import approximately 2.2 (million tonnes per annum) MTPA LPG, nearly 10 percent of our annual imports – for the contract year 2026, from the US Gulf Coast – the first structured contract of US LPG for the Indian market,” said the minister. announced on X.

This purchase is based on using Mount Belvieu as a benchmark for LPG purchases and a team of Indian officials from Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) had visited the US and held discussions with major US producers over the past few months, which have now been concluded, he added.

“Even as world prices rose by over 60 per cent last year, Modi Ji ensured that our Ujjwala consumers continued to receive LPG cylinders for just ₹500-550 when the actual cost of the cylinder was over ₹1,100. The government last year shouldered the cost of over ₹40,000 crore to ensure that our mothers and sisters did not feel the burden of the rising international LPG prices,” Puri points out.

The development also comes close to a competition between Saudi Arabia – India’s main LPG supplier – and the US to sell their LPG cargoes in Asia.

For example, Saudi Aramco has significantly reduced the Saudi CP price for propane and butane in recent months, which traders attribute to increasing competition from the US, subdued crude oil prices and lower consumption.

For example, the Saudi Contract Price (Saudi CP) – an international LPG benchmark – has recently corrected sharply due to geopolitical trade tensions, rising global production, weak demand and a seasonal slowdown after winter. It fell from over $600 per tonne in March 2025 to $506 per tonne in August 2025. It fell further in October and November.

Analysts and traders expect prices to fall further as the ongoing tariff war raises fears of a drop in global demand.

Saudi Arabia accounts for about a third of India’s cumulative LPG imports, which stood at about 20.67 million tonnes (mt) in FY25 and 10.84 million tonnes in H1 FY26.

India has just over 33.07 crore active domestic consumers of LPG, of which around 10.33 crore are getting subsidized cylinders under the Pradhan Mantri Ujjwala Yojana (PMUY).

Published on November 17, 2025