India Enters Long-Term LPG Import Pact with US to Bolster Energy Security

In a move aimed at strengthening its energy security, India has signed its first structured long-term deal to import liquefied petroleum gas (LPG) from the United States, securing 2.2 million tonnes per annum (MTPA) for the contract year 2026. 

India’s First Long-Term US LPG Deal Secures 2.2 MTPA Supply 

On November 17, 2025, Petroleum Minister Hardeep Singh Puri confirmed that public sector oil companies from India have finalised a 1-year agreement to import LPG from the US. The contract involves procuring around 2.2 MTPA of LPG, equivalent to nearly 10% of India’s annual LPG imports. This is the first such long-term structured deal between the countries, marking a milestone in India’s efforts to diversify its energy sourcing portfolio. 

LPG Imports to Be Benchmarked to Mount Belvieu Price 

The imported LPG will be sourced from the US Gulf Coast and is benchmarked to Mount Belvieu, a widely recognised pricing hub for global LPG trade. Major oil companies, Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), have collectively secured the deal after engaging in discussions with American producers during their recent visits to the US. 

Government Support for Households Despite Global Price Rise 

While global LPG prices surged by over 60% last year, the Indian government, under the leadership of Prime Minister Narendra Modi, ensured that beneficiaries under the Pradhan Mantri Ujjwala Yojana continued to access LPG at subsidised rates of ₹500–₹550 per cylinder, despite actual market prices exceeding ₹1,100. To mitigate the impact on consumers, the government absorbed a financial burden exceeding ₹40,000 crore during the year. 

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Conclusion 

The landmark LPG import deal with the US marks a pivotal step in India’s energy diversification efforts. Through this structured agreement, the country aims to enhance supply stability, shield users from global price fluctuations, and maintain affordability for millions of households. 

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