India Seals First Long-Term US LPG Deal for Energy Security

• India-US first long-term LPG deal: 2.2 MTPA from 2026
• Covers 10% of imports; benchmarks to Mount Belvieu
• Boosts security amid 60% price surge, Rs 40K cr subsidy

India​‍​‌‍​‍‌​‍​‌‍​‍‌ has signed its first-ever long-term deal for Liquefied Petroleum Gas (LPG) imports with the United States, a significant move to enhance the country's energy security in the face of unstable global markets and increased domestic demand. The one-year agreement starting in 2026 links three Indian public sector companies— Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)— with U.S. producers and commits the annual supply of about 2.2 million tonnes per annum (MTPA) from the U.S. Gulf Coast.

This quantity corresponds to approximately 10% of India's total yearly LPG imports, with prices set against the Mount Belvieu benchmark, but the exact terms of the deal have not been revealed. Hardeep Singh Puri, Union Petroleum and Natural Gas Minister, called the agreement a "historic first," attributing it to the tough negotiations that followed the visits of the Indian delegations to the U.S. facilities.

Also Read: EIL Signs MoU with NMDC Energy UAE for Collaboration

He emphasized its importance in the diversification of supply chains thus stabilizing and making LPG affordable for households, mainly those under the Pradhan Mantri Ujjwala Yojana, which has provided clean cooking fuel to millions of women. Due to the skyrocketing international prices—more than 60%—the government had to provide a subsidy to the tune of Rs 40,000 crores in the past year to contain the cylinder costs at Rs 500-550, which is significantly lower than the market price that is over Rs 1,100.

India, as the largest and fastest-growing LPG consumer in the world, has relied heavily on the traditional suppliers. However, this agreement with the U.S. is a clear message that the country is taking a strategic step to lessen the risks associated with geopolitics and the price fluctuations. The deal to use the U.S. Gulf Coast facilities can be seen as a measure to prevent disruptions and at the same time, it also promotes the bilateral energy collaboration. It certainly makes it possible for the contract to be renewed or for the volumes to be increased to stabilize the supplies for the growing market, and it is consistent with the bigger self-reliant and resilient energy infrastructure ​‍​‌‍​‍‌​‍​‌‍​‍‌goals.