India inks ‘historic first’ deal to source around 10% of its LPG imports from US in 2026

According to industry sources, the three public sector refiners—Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)—have awarded their joint tender for US LPG imports in the coming year to Chevron, Phillips 66, and TotalEnergies Trading. The deal’s commercial details were not available.

LPG is predominantly used as a cooking fuel, with much of India’s requirement being imported from countries like Saudi Arabia, United Arab Emirates, Qatar, and Kuwait. This deal is expected to reduce India’s dependence for LPG on its traditional West Asian suppliers as the country looks to diversify import sources in search of better prices. A significant chunk of LPG sales to households in India is subsidised by the government. Over the past few years, the government has made concerted efforts to increase LPG penetration by bringing poor and rural households under the LPG net in a bid to cut the use of traditional and polluting cooking fuels.

This term deal for US LPG comes at a time when India is looking to reduce its trade surplus with the US amid delicate trade pact negotiations between the two countries. Amid trade tensions and India’s heavy imports of Russian crude oil, the Donald Trump administration imposed tariffs totaling 50 per cent on most Indian goods. New Delhi and Washington are locked in negotiations to finalise a trade deal to reduce the tariffs.

Sources in the Indian government have indicated that India could step up energy imports from the US to reach an agreement with Washington. The past few months have seen Indian refiners increasing oil imports from the US, which has been seen as an indication that New Delhi is willing to buy more American energy amid trade pact negotiations.

In February, when Prime Minister Narendra Modi met US President Donald Trump in Washington, the latter said that India and the US had agreed to take steps towards making Washington “a leading supplier of oil and gas to India”, which could help bridge the trade deficit between the two countries. Trump had added that the US will “hopefully” be India’s top oil and gas supplier.

In November, Commerce Minister Piyush Goyal had said that India is a large importer of energy and that its energy security goals will have a “very high element” of US involvement in the years to come.

“The world recognises that energy is one area where we all have to work together. India is a big player in the energy field. We are big importers of energy from across the world, including the US. We expect to increase our trade with the US on energy products in the years to come. Being close friends, natural partners, our energy security goals will have a very high element of US involvement,” Goyal had said at the India-US Strategic Forum event in New York.

India is the world’s third-largest consumer of crude oil with an import dependency of around 88 per cent. The country is also among the biggest importers of liquefied natural gas (LNG), with around half of its natural gas demand being met through imports. For the past few years, the US has been the fifth-largest supplier of crude oil to India. It has also been the second-largest supplier of liquefied natural gas (LNG) to India. As for LPG, over 60 per cent of the petroleum fuel’s requirement in India is met through imports.

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