India Signs ‘Historic’ Deal to Import 2.2 MTPA LPG from the US: Puri

India has taken a major step toward diversifying its energy sources with a new agreement to import Liquefied Petroleum Gas (LPG) from the United States. Union Petroleum Minister Hardeep Singh Puri announced on November 17 that state-run oil companies have finalized a one-year contract to import 2.2 MTPA LPG, which accounts for nearly 10% of India’s annual LPG requirement.

“In our endeavour to provide secure, affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing,” Puri said in a post on X, calling the deal “historic.”

A First-of-its-Kind Structured US LPG Contract

Under the agreement, public sector oil companies will import LPG from the US Gulf Coast for the contract year 2026.
Puri highlighted that this marks the first structured US LPG contract for the Indian market.

He added that the deal was finalized after extensive engagement by senior officials from Indian Oil, BPCL, and HPCL, who visited the US and held discussions with major oil producers.

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Benchmark Based on Mount Belvieu

The minister noted that the procurement will be priced using Mount Belvieu, a key US benchmark for LPG. This pricing structure ensures transparency and aligns with global standards.

India Continues to Offer the Lowest Global LPG Prices to Consumers

Puri reiterated that despite fluctuations in international markets, PSU oil companies have maintained some of the lowest global LPG prices for Indian households.

He emphasized that even as global LPG prices surged over 60% last year, Ujjwala consumers continued to receive cylinders at just ₹500–550, while the actual cost touched over ₹1,100 per cylinder.

“Government of India incurred over ₹40,000 crore last year to ensure our mothers and sisters did not feel the burden of rising international LPG prices,” Puri said.

Deal Comes Amid Broader US–India Trade Negotiations

The new LPG agreement also comes at a time when India and the US are working toward a broader trade deal, which may be concluded by the end of 2025. Reports suggest that the Donald Trump administration could remove the 25% tariff imposed earlier on Indian exports in response to India’s purchase of Russian energy.

Previously, the US administration had imposed 50% tariffs on certain Indian shipments, with 25% specifically tied to buying Russian crude.

India Moving to Diversify Beyond Russian Oil

In recent weeks, New Delhi has accelerated efforts to reduce its reliance on Russian energy and broaden its sourcing strategy. Officials have also reported “a lot of positive developments” in discussions between the two nations, following months of stalled talks.

An official told ANI, “We have two things going on with them. A reciprocal trade negotiation, and a Russian oil issue, where we’ve seen market improvement on that end.”

This historic LPG deal is expected to strengthen India’s energy security, support affordable LPG supply, and deepen strategic trade ties with the United States.

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