India plans to double US LPG imports to reduce dependence on Gulf supplies: Report

The recent conflict in West Asia exposed India's vulnerability to disruptions in energy supplies after cargo movements through the Strait of Hormuz were affected, prompting concerns over the availability of liquefied petroleum gas (LPG). While crude oil supplies remained relatively stable, the disruption to LPG shipments from the Gulf pushed Indian oil companies to seek alternative sources to ensure uninterrupted domestic supplies.

Indian oil companies are reportedly preparing to substantially increase liquefied petroleum gas (LPG) imports from the United States, with discussions underway to potentially double the current contracted volume of 2.2 million tonnes a year as the country seeks to diversify its sourcing and reduce reliance on Gulf suppliers.

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People familiar with the discussions said the contracted quantity could be doubled. Oil marketing companies (OMCs) are also exploring alternative sourcing options, including Algeria, to strengthen India's LPG supply chain, reported TOI.

India signed a one-year structured agreement with the US in November 2025 to import nearly 10 per cent of its annual cooking gas requirement during the 2026 contract year.

During the West Asia conflict, the US emerged as one of India's largest LPG suppliers, providing crucial support after cargoes from the Gulf were stranded.

Strategic reserves in focus

Increasing imports from the US is expected to reduce India's dependence on Gulf supplies while supporting the government's plan to build strategic LPG reserves against future supply disruptions.

In May, the petroleum ministry directed OMCs to prepare an action plan for creating a 30-day strategic reserve of LPG. Higher imports from diversified sources, particularly the US, are expected to help companies meet that objective.

"During the conflict, we were confident about crude availability, but LPG was a major cause of worry.

Besides Gulf nations, there are not many countries that produce LPG. We scouted for alternative sources and managed to secure supplies from the US to meet our requirements during the crisis," a senior oil company executive told TOI.

"The US has substantial additional LPG export capacity and we can tap that to diversify our supplies," the executive added.

The proposed 30-day reserve will be in addition to the 45-day rolling stock maintained by oil retailers to meet demand for domestic and commercial LPG cylinders.

US share of imports rises sharply

According to Kpler data, less than 8 per cent of India's imported LPG came from the US in 2025.

The share increased to nearly 12 per cent in January after the structured contract took effect, rose to 13 per cent in February, and climbed to 37 per cent in March as the war disrupted West Asian cargo movements through the Strait of Hormuz.

The proportion of US-origin LPG increased further to 40 per cent in April, 55 per cent in May and 65 per cent in June.

Apart from the US, India also sourced LPG from Argentina, Nigeria and Malaysia.

Energy imports have become an increasingly important component of trade with the US, particularly after the West Asia conflict, helping narrow the trade gap.