Representative image (PTI)
NEW DELHI: Oil companies are looking to step up LPG purchases from the US from the current level of 2.2 million tonnes a year, as they seek to maintain a diversified sourcing portfolio and consciously reduce dependence on the Gulf.People familiar with the discussions said the contracted amount may be doubled. Oil marketing companies are also exploring other markets, such as Algeria.India had signed a one-year structured contract with the US in Nov 2025 to import nearly 10% of its annual requirement of cooking gas during the 2026 contract year. But during the West Asia conflict, the US emerged as one of India’s largest LPG suppliers, providing much-needed cushion after cargoes from the Gulf were stranded.The move will not only reduce dependence on the Gulf for domestic LPG requirements but also help India build strategic reserves for future disruptions. The petroleum ministry had asked OMCs in May to prepare an action plan for creating a 30-day strategic reserve of LPG. Greater diversification and higher purchases from the US could help companies achieve that target.”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 LPG reserve will be in addition to the 45-day rolling stock maintained by oil retailers to meet demand for both domestic and commercial LPG cylinders.According to Kpler data, India sourced less than 8% of its imported LPG from the US in 2025. The share rose to nearly 12% in Jan, when the structured contract came into force, increased to 13% in Feb, and jumped to 37% in March as the war broke out and West Asian cargo stopped transiting the Strait of Hormuz. The share of US-origin LPG rose further to 40% in April, 55% in May and 65% in June.Energy has emerged as a key import from the US, particularly after the West Asia war, helping narrow the trade gap. Apart from the US, India also tapped Argentina, Nigeria and Malaysia for LPG supplies.
