India-US ink major LPG import deal; to procure 2.2 mt per year in 2026
Announcing the deal, Oil Minister Hardeep Singh Puri said on Monday that one of the largest and the world’s fastest growing liquefied petroleum gas market opens up to the US
In a significant development, Indian government controlled oil marketing companies (OMCs) will import around 2.2 million tonnes LPG from the US in 2026 calendar year — roughly one-tenth of the country’s consumption.
This is among the first in a series of deals through which India aims to increase its energy products purchases from the US. India’s annual energy product purchases from Washington are around $12-13 billion annually, which New Delhi wants to top up with an additional $12-13 billion.
Announcing the deal, Oil Minister Hardeep Singh Puri said on Monday that one of the largest and the world’s fastest growing liquefied petroleum gas (LPG) market opens up to the US.
“In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing. In a significant development, Indian PSU oil companies have successfully concluded a 1 year deal for imports of around 2.2 (million tonnes per annum) MTPA LPG, close to 10 per cent of our annual imports — for the contract year 2026, to be sourced from the US Gulf Coast — the first structured contract of US LPG for the Indian market,” the Minister announced on X.
This purchase is based on using Mount Belvieu as the 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 engaged in discussions with major US producers over the last few months, which have been concluded now, he added.
“Even as global prices soared by over 60 per cent last year, Modi Ji ensured that our Ujjwala consumers continued to receive LPG cylinders at just ₹500-550 whereas the actual cost of the cylinder was over ₹1,100. Government incurred the cost of over ₹40,000 crore last year in order to ensure our mothers and sisters did not feel the burden of rising international LPG prices,” Puri emphasised.
The development also comes close on the heels of a competition between Saudi Arabia — India’s main LPG supplier — and the US to sell their LPG cargoes in Asia.
For instance, Saudi Aramco slashed the benchmark Saudi CP price for propane and butane significantly in the last few months, which traders attribute to rising competition from the US, subdued crude oil prices and lower consumption.
For instance, the Saudi Contract Price (Saudi CP) — an international LPG benchmark — has sharply corrected recently due to geopolitical trade tensions, rising global production, weak demand, and seasonal slowdown after winter. It dropped to $506 per tonne in August 2025 from over $600 per MT in March 2025. It has declined further in October and November.
Analysts and traders expect prices to soften further as the ongoing tariff war is raising fears of a decline in global demand.
Saudi Arabia accounts for around one-third of India’s cumulative LPG imports, which stood at around 20.67 million tonnes (mt) in FY25 and at 10.84 mt in H1 FY26.
India has a little over 33.07 crore active domestic consumers of LPG with roughly 10.33 crore getting subsidised cylinders under the Pradhan Mantri Ujjwala Yojana (PMUY).
Published on November 17, 2025
