A New Era in Indian PSUs Energy Strategy: First Structured LPG Deal with the US
Indian PSUs sign first structured deal to import 2.2 MTPA LPG from the US Gulf Coast, boosting energy security and diversifying India’s fuel sources.
India Strengthens Energy Security as Indian PSUs Sign First Structured Contract to Source LPG From US Gulf Coast
A Major Step to Strengthen India’s LPG Supply Chain
India has taken a decisive step toward securing long-term energy stability with the announcement of its first structured agreement to import LPG directly from the US Gulf Coast. Union Petroleum and Natural Gas Minister Hardeep Singh Puri confirmed that Indian PSUs have successfully signed a one-year contract to source around 2.2 million tonnes per annum (MTPA) of LPG for the contract year 2026. This volume represents nearly 10% of India’s total annual LPG imports, making the partnership a strategically significant move for the nation’s rapidly expanding fuel market. The decision reflects the government’s continued efforts to diversify supply channels and reduce dependence on traditional regions.
Why This LPG Deal Matters for India
India is among the world’s fastest-growing LPG consumers, driven by rising household demand and government-backed initiatives to encourage clean cooking fuel adoption. By sourcing LPG from the US Gulf Coast—a major global hub for LPG production—India adds a reliable and competitive partner to its energy portfolio. The contract is based on the Mount Belvieu pricing benchmark, ensuring transparency and fairness in procurement. Minister Puri noted that diversification is essential to maintaining stable prices and protecting consumers from unpredictable global market swings.
Joint Efforts of India’s Leading Oil PSUs
The agreement was achieved after months of coordinated engagement by Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). Teams from these PSUs visited the US to meet leading LPG producers and finalize terms that would benefit Indian consumers in the long run. Their collaboration resulted in the first structured US LPG contract ever signed for the Indian market—a historic milestone indicating India’s strategic push for secure energy partnerships.
Affordable LPG for Indian Household Consumers
One of the government’s biggest priorities has been ensuring affordable access to LPG for households, especially for women and low-income families. Minister Puri highlighted the government’s strong commitment to continue supporting Ujjwala beneficiaries. Even when global LPG prices surged by over 60% last year, the government held domestic prices steady for Ujjwala consumers at Rs 500–550 per cylinder. With the actual cost exceeding Rs 1,100 at the time, the government bore a massive subsidy burden of more than Rs 40,000 crore. The new supply deal with the US is expected to stabilize long-term procurement costs, helping India maintain affordable pricing for millions of households.
Strengthening the India–US Energy Partnership
The structured LPG deal also reflects growing energy collaboration between India and the United States. Earlier, Commerce Minister Piyush Goyal emphasized India’s plans to increase energy trade with the US, noting that India contributes significantly to America’s talent and innovation ecosystem. A joint statement signed earlier this year reaffirmed that both nations consider energy security essential for economic and social development. The new LPG agreement deepens this partnership, aligning both countries’ goals of ensuring reliable and affordable energy supplies.
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A Strategic Move Toward Long-Term Stability
The partnership with the US Gulf Coast is not only about meeting immediate demand—it is a strategic investment in India’s long-term energy resilience. Securing 10% of annual LPG imports through a stable, structured, and benchmarked contract strengthens India’s ability to manage global price fluctuations and maintain uninterrupted supply. As India’s LPG consumption continues to grow, the deal stands as an example of proactive policymaking and international collaboration that will benefit millions of households across the nation.
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