Finshots Daily Making sense of India's first ever LPG import deal with the US
Nov 17, 2025
India's first long-term LPG import deal with the US is a game changer! The podcast explores how this contract will diversify sources away from the often-reliable Middle East. Discover why US LPG, despite its propane bias, is strategically beneficial due to geopolitical shifts and pricing advantages. The discussion delves into new pricing benchmarks that give Indian companies leverage. However, challenges like higher freight costs and blending issues are also considered. Plus, will consumers benefit from lower cylinder prices?
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Why India Prefers Butane-Rich LPG
- India prefers butane-rich LPG because butane vaporizes at higher temperatures and gives a steadier cooking flame.
- That preference makes India heavily reliant on Middle Eastern refinery-derived LPG which is naturally butane-heavy.
How US LPG Became Competitive
- US LPG is propane-dominant because it comes mainly from natural gas processing, not oil refining.
- A recent drop in Chinese demand and higher Middle East freight made US LPG temporarily price-competitive for India.
First Structured US LPG Deal For India
- India signed a structured one-year contract to buy 2.2 million tonnes per annum from the US, about 10% of imports.
- This moves India away from mostly spot purchases toward a predictable supply arrangement starting 2026.