New Delhi: India’s state-run fuel retailers are seeking to issue a joint tender for about 2.75 million metric tons (mmt) of liquefied petroleum gas from the United States up to 2027, another step in New Delhi’s push to diversify from energy supplies from the Middle East.
The three firms behind the tender Indian Oil Corporation, Bharat Petroleum Corp and Hindustan Petroleum Corp are all calling for four very big gas carrier cargoes this month, with deliveries divided evenly among propane and butane for each cargo. The tender also includes one 45,000 ton/per month offloading cargo on a free-on-board basis. The bidding will close on 22nd October.
Propane Butane Gas (LPG) is a combination of propane and butane gases, which are mainly used in India for cooking and heating, and India is the second largest importer of LPG after China. In 2025, the country imported nearly 90% of 21.85 million metric tons of LPG from the Middle East, which accounts for around two-thirds of the nation’s LPG consumption.
That reliance has been challenged since early this year when the United States, Israel and Iran clashed and used the Strait of Hormuz to disrupt tanker traffic, leading to a shortage and forcing New Delhi to seek alternative sources of supply. The US has since emerged as India’s largest source of LPG, accounting for 3.9 million tons of imports till August this year.
The Indian government has instructed the three state refiners to buy at least 15% of their LPG requirement for 2027 from the US under term contracts compared to approximately 10% under the current 2026 term contract, which delivered around 2.2 million tons the first ever formal LPG deal of this kind between the two nations.
The additional purchases also help bring India one step closer to addressing trade security concerns, while India and Washington Dublin negotiations plans for a broader trade deal.
