By: Vandana Jhingan

In a landmark move to strengthen energy security, India has finalized its first major structured LPG import agreement with the United States. Shri Hardeep Singh Puri, Minister of Petroleum and Natural Gas, announced that India’s public sector oil companies have secured a one-year contract to import approximately 2.2 million metric tonnes per annum (MTPA) of LPG from the U.S. Gulf Coast for 2026. The deal represents nearly 10 percent of India’s annual LPG imports and marks the first time the Indian market has entered into a structured long-term arrangement with American suppliers.

Calling it a “historic development,” the Minister said the agreement opens one of the world’s largest and fastest-growing LPG markets to U.S. producers, creating a new strategic chapter in Indo-U.S. energy cooperation.

The agreement follows months of efforts by the Government of India to diversify its LPG sourcing and ensure uninterrupted access to affordable cooking fuel. A delegation from IndianOil, Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) visited the United States from July 21 to 24, 2025, holding extensive discussions with major producers. These negotiations, structured around the Mount Belvieu index—the benchmark for global LPG pricing—ultimately resulted in the final contract.

Shri Puri noted that under the leadership of Prime Minister Narendra Modi, PSU oil companies have consistently delivered LPG to Indian households at some of the lowest global prices. Despite a more than 60 percent surge in international LPG prices last year, beneficiaries of the Pradhan Mantri Ujjwala Yojana continued to receive cylinders at a subsidized rate of ₹500–550, even as actual market costs surpassed ₹1100. To shield families—especially women—from rising global prices, the Government of India absorbed over ₹40,000 crore in subsidies in the previous year.

The Minister emphasized that this new sourcing arrangement for 2026 represents another significant step toward enhancing India’s long-term energy security, while ensuring clean and affordable cooking fuel reaches millions of households across the country.