India signs first-ever long-term LPG import deal with US
What's the story
In a major development, India has signed its first-ever one-year liquefied petroleum gas (LPG) import deal with the United States. The agreement was announced by Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Monday. He described it as a "historic first" for India's LPG sector and a significant step toward strengthening the country's energy security.
Deal details
Agreement to import 2.2 MTPA of LPG
The deal, according to Puri, is for an annual import of 2.2 million tons per annum (MTPA) of LPG for the contract year 2026. This will account for nearly a 10th of India's annual LPG imports and will be sourced from the US Gulf Coast. Notably, this is the first structured one-year contract for American LPG in the Indian market.
Pricing strategy
Deal priced against Mount Belvieu benchmark
The deal has been priced against the Mount Belvieu benchmark, a global pricing hub for LPG. Puri revealed that teams from Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) visited the US in recent months to negotiate with top American producers. These talks were successfully concluded, paving the way for this historic agreement.
Subsidy support
Government's commitment to affordable LPG
Puri also emphasized the government's commitment to providing affordable LPG to Indian households, especially women beneficiaries of the Pradhan Mantri Ujjwala Yojana. He noted that even when global LPG prices surged over 60% last year, PM Modi ensured Ujjwala consumers paid only ₹500-550 per cylinder instead of the actual cost of over ₹1,100. This was made possible by a subsidy burden of over ₹40,000 crore borne by the Government of India.