India has signed its first structured, long-term contract for LPG imports from the United States. The government states this move will strengthen the country’s energy security and diversify supply sources amid rising global volatility.
US finalize 1 year deal with India over LPG imports
Union Petroleum and Natural Gas Minister announced that state-run oil companies finalised a one-year deal to import around 2.2 million tonnes per annum (MTPA) of LPG from the US. This volume is considered near around 10% of India’s annual LPG imports and mark significant change in the country’s sourcing strategy.
The contract is India’s first structured LPG purchase agreement with the US and linked to Mont Belvieu. A joint team from Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) travelled to the US over the past few months to negotiate with major American producers for this deal.
Why this deal matters?
India is the world’s second-largest LPG consumer. Demand driven by widespread household adoption and the ongoing expansion of the Ujjwala Yojana. It provides subsidised LPG connections to low-income households. Currently, India imports over 50% of its LPG needs, with most of the supply coming from West Asian markets.
The decision for LPG imports is part of New Delhi’s strategy. It reduce dependence on traditional suppliers, improve supply stability, and protect against sharp price increases in the global market. Puri pointed out that despite global LPG prices increasing by more than 60% last year, the government ensured that Ujjwala beneficiaries continued to pay only Rs 500–550 per cylinder, while actual costs reached Rs 1,100.
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