Historic India-US LPG deal finalised: Will cooking gas become cheaper?

New Delhi: India has signed a historic LPG deal with the United States. Discussions about this deal were going on for a long time. Earlier, the Indian administration on many occasions said that they are working on a big energy deal with the US. Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday that Indian public sector oil companies have signed a one-year agreement to import LPG from the United States for the first time.

The Union Minister informed about the deal through a social media post on Monday, describing it as a "historic initiative” for the country's LPG market. One of the world's largest and fastest growing LPG markets, India has opened to the US. In our endeavour to provide safe and affordable supply of LPG to the people of India, we are diversifying our LPG sourcing. In a significant development, India's state-run oil companies have successfully completed a one-year agreement to import about 2.2 metric tonnes of LPG per annum.

Highlighting India's position as one of the largest and fastest growing LPG markets in the world, Puri said the new agreement is an important milestone in the country's efforts to diversify its LPG sourcing. According to the minister, Indian public sector companies have signed an agreement to import about 2.2 million tonnes per annum (MTPA) of LPG for the contract year 2026. This amount is about 10 percent of India's annual LPG imports and will be sourced from the US Gulf Coast. He said that this is the first long-term contract related to American LPG for the Indian market.

Puri said that this purchase has been placed on the benchmark of Mount Belviu, a major pricing point for the global LPG trade. He further said that teams of Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) had visited the United States in recent months to discuss with major US producers, which has now been successfully concluded.

The Minister also highlighted the government's commitment to ensure affordable cooking gas for Indian families, especially women benefiting from Pradhan Mantri Ujjwala Yojana. He said that despite the increase in cooking gas prices by more than 60 percent globally last year, Prime Minister Narendra Modi has ensured that Ujjwala consumers have to pay only Rs 500-550 per cylinder, while the actual cost is more than Rs 1,100. To protect consumers from international price shocks, the Indian government raised a burden of over Rs 40,000 million during the year.