India has taken a major step toward ensuring a steady and affordable supply of LPG by signing a historic agreement with the United States. Talks regarding this deal had been ongoing for quite some time. Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday that, for the first time ever, Indian public sector oil companies have finalized a one-year contract to import LPG from the US. Here’s what the minister revealed about this landmark deal.
A Major Milestone
In a social media post, Puri described the development as a historic milestone for India’s LPG market. He said that India, one of the world’s largest and fastest-growing LPG markets, has officially opened its doors to US-sourced LPG. As part of India’s strategy to diversify its energy sources and provide secure, affordable LPG supplies to citizens, state-owned companies will now import about 2.2 million tonnes of LPG annually under this agreement.
What This Deal Means
Highlighting the scale and growth of India’s LPG demand, Puri said the new contract marks a significant step in diversifying supply sources. Public sector companies have contracted to import nearly 2.2 million tonnes per year (MTPA) of LPG for 2026. This accounts for around 10 percent of India’s total yearly LPG imports. The supply will come from the US Gulf Coast, making it the first long-term contract for US-based LPG in the Indian market.
Efforts Behind the Agreement
The minister explained that the pricing was benchmarked to Mount Belvieu, one of the most important pricing hubs for LPG globally. Teams from IOCL, BPCL, and HPCL visited the US multiple times over the past few months to negotiate with major producers, ultimately finalizing this contract successfully.
Impact on Consumers
Puri emphasized the government’s continued focus on keeping cooking gas affordable, especially for households under the Pradhan Mantri Ujjwala Yojana. He pointed out that even though global LPG prices rose by more than 60 percent last year, Ujjwala beneficiaries paid only ₹500–550 per cylinder, while the actual market price exceeded ₹1,100. To shield consumers from global price fluctuations, the government absorbed a cost burden of over ₹40,000 crore.
With this new US deal, India aims to stabilize supply, reduce dependence on any single region, and potentially protect consumers from extreme price spikes—raising hopes that LPG cylinders may become more affordable in the future.
