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Indian refiners target cheaper US LPG imports with help from China tariffs
Chinese import tariffs have unwittingly come to India’s assistance to help boost imports of US liquefied petroleum gas (LPG) at rates cheaper than what it pays for supplies from West Asia, according to industry sources and shipping data.
After stepping up crude imports and tying up US liquefied natural gas (LNG) supplies, Indian state-run oil companies are evaluating options for LPG imports from the US in July, directly under term contract arrangements — when they begin talks to secure shipments of the cooking fuel for 2026, top refining sources told Business Standard.
Talks are also on to secure cheap US LPG in the immediate term in exchange for contracted West Asian supplies. India is a $12 billion LPG market, equivalent to a third of its trade surplus with the US for 2024. India’s LPG market is dominated by supplies from United Arab Emirates, Qatar, Kuwait, and Saudi Arabia.
The advent of US LPG will enhance India’s security of supply for a sensitive fuel, used in kitchens across the nation, an official said. India imported around 20.8 million tonnes of LPG, around 66 per cent of its needs, in 2024-25, according to oil ministry data. The US share was negligible.
“Cheap US LPG is flooding the market,” an official from a state refiner said, adding that with the right discounts US suppliers could capture a large portion of the Indian LPG market, just as discounted Russian oil gobbled up 40 per cent of India’s crude oil import business after the war in Ukraine and accompanying sanctions, the official said.
It depends on how long the Chinese import tariffs last, another official said. The availability of US LPG was driven by the steep 145 per cent tariffs imposed by the Trump administration last month on most Chinese imports, leading to China retaliating with a 125 per cent charge on US purchases.
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