On 19th November 2025, India signed its first major, structured contract to import 2.2 million tonnes per annum (MTPA) of liquefied petroleum gas (LPG) from the US Gulf Coast for 2026. Announced by the Minister of Petroleum and Natural Gas, Hardeep Singh Puri, this contract is India’s answer to questions of energy security and affordability on a global stage.
Now comes the question: Why is the US deal called “Historic”? So the answer lies in the numbers so let’s break it down: India’s annual LPG imports hover around 22 million tonnes. With this deal, nearly 10% of next year’s imports will come straight from the United States. Until now, Middle Eastern suppliers dominated this market.
This diversification not only hedges India against regional supply disruptions, but also integrates the world’s fastest-growing LPG market with the world’s largest producer. For the first time, India’s PSU oil giants—IndianOil, BPCL, and HPCL—joined hands in a structured deal based on US Mount Belvieu benchmark prices, marking a strategic shift in how the nation buys its cooking gas.
And how was this deal sealed? It wasn’t an overnight affair. In July 2025, an elite team from IndianOil, BPCL, and HPCL visited the US, meeting key American producers. The goal? To craft a reliable, year-long, index-based contract—a move that ensures supply predictability, price stability, and risk minimization for Indian consumers. “Under the decisive leadership of Prime Minister Narendra Modi, India’s energy needs are being secured proactively,” said Shri Puri, underscoring the government’s intent to think beyond immediate crises.
Now let us discuss who really benefits—and how much? Even as international LPG prices soared over 60% last year, Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries continued to get subsidised cylinders at just ₹500–550, despite global costs hitting ₹1,100 per cylinder. The government absorbed ₹40,000 crore in subsidy burden last year alone (PIB data). This new sourcing deal ensures such support remains sustainable, with reliable supply pipelines delivering LPG at globally competitive prices.
Will this make gas cheaper? Not directly overnight, but it strengthens the price cushion. With two major sources—Middle East and US—the risk of one region’s price or supply shocks throttling the Indian market is reduced. Stable, diversified sourcing was highlighted by Nilesh Ghuge, HDFC Securities, who called the move “a positive step” bringing “stability” and deeper integration into the global LPG supply chain. This stability could translate into more predictable prices for end users, especially as global oil prices remain volatile.
Could there be disruption in supply or prices? India just overcame a brief supply disruption in Mumbai—a reminder that logistics and geopolitics affect everyday cooking. This new deal, by locking 10% of imports from the US, builds redundancy, making such disruptions less likely and less impactful. Experts believe quick response and diversified sourcing are the keys to ensuring households never have to worry about running out of gas.
What does this mean for PSU oil companies and refiners? For public oil marketing companies—like IndianOil, BPCL, and HPCL—this deal stabilizes market share, supply, and margins. Though retail prices remain regulated, companies stand to benefit from lower under-recoveries, as the government will reimburse ₹30,000 crore in losses from the previous fiscal over the next year, supporting balance sheets and working capital. Meanwhile, standalone refiners like MRPL and CPCL are poised for strong quarters with firm refining margins, a trend likely to hold as global “fuel cracks” remain wide.
Will energy security be a game-changer for households? The answer is absolutely. With more stable prices and diversified supply, Indian homes can expect uninterrupted, affordable access to clean energy. The move also puts India on the map as a major player in the global energy arena—making every Indian kitchen part of a grand narrative of self-reliance and global integration.
