India Signs First Long-Term US LPG Import Deal

Indian public sector oil companies have entered a first-of-its-kind structured long-term agreement to import 2.2 million tonnes per annum of liquefied petroleum gas (LPG) from the United States for the 2026 contract year. Announced by Hardeep Singh Puri, the Union Minister for Petroleum and Natural Gas, the deal sources fuel from the US Gulf Coast and represents nearly 10% of India's total annual LPG imports.

Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited negotiated the agreement, which was awarded to Chevron, Phillips 66, and TotalEnergies Trading. The pricing for the fuel is benchmarked to Mount Belvieu.

This strategic shift aims to diversify India's energy sourcing away from traditional West Asian suppliers. The move also serves as a diplomatic tool to reduce the trade surplus with the United States during trade pact negotiations and in response to tariffs imposed by the Donald Trump administration. To manage this transition, the Government of India has absorbed over ₹40,000 crore in subsidies to protect consumers from price volatility.