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Sources claim that India will import 10% of its cooking gases from the US by 2026.

Four industry sources with knowledge of the matter have said that India intends to import about 10% of its domestic cooking gas from the U.S. starting in 2026. This is part of an effort to increase energy purchases and narrow the trade gap between Washington and India.

Middle Eastern LPG producers are the world's largest importers and consumers of liquefied gas. In 2024, more than 90% (or 20.5 million tons) of their imports will come from this region.

LPG, a mixture of butane and propane used as a cooking fuel, is imported mainly by state retailers Indian Oil Corp. Bharat Petroleum Corp. and Hindustan Petroleum Corp. and sold to households at a subventioned price.

India rarely purchased U.S. LPG before due to the higher freight costs. However, state retailers started buying U.S. LPG after China imposed retaliatory tariffs on U.S. LPG imports.

Sources have previously said that India intends to eliminate the import tax on U.S. butane and propane used to make LPG.

India has committed to increasing U.S. energy purchase by $10 to $25 billion within the next few years. The two nations also agreed in February to aim for $500 billion of bilateral trade by 2030.

Data obtained from sources revealed that India's imports of U.S. crude oil have more than doubled in the past year.

We are looking at the U.S. for a reliable source of crude oil and LPG. "We need to diversify the LPG sources we use," said one source who declined to give his name because he wasn't authorized to speak with media.

India is diversifying its crude suppliers to support its growing refinery capacity and reduce geopolitical risk. LPG is mainly purchased from the Middle East on a FOB basis.

The 10% Chinese tariff on U.S. propane has opened arbitrage opportunities for Indian customers, further encouraging a move to U.S. cargoes.

He said: "We prefer to buy U.S. crude on a delivery basis, to reduce freight risks."

Two sources reported that the Indian state refiners see an annual LPG growth of 5% to 6 %, and total imports will rise to 22 to 23 million metric tonnes by 2026.

The Indian oil ministry as well as the three state fuel retailers have not responded to comments immediately.

A third source in the industry said that pricing will be key in determining exact volumes of U.S. LPG imported.

The International Energy Agency predicts that India's LPG consumption will grow by an average 2.5% per year between 2024 and 2030. This would amount to 1.2 million barrels of LPG per day or approximately 37,7 million tonnes. (Reporting and editing by Tony Munroe, Kate Mayberry, and Nidhi verma)

(source: Reuters)