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India's Crude Oil Import Bill To Peak at Record $125 BN in Current Fiscal: Oil Ministry

India's crude oil import bill is projected to reach a record $125 billion in the current fiscal year ending March 2019, a 42% increase from the previous year. This would be the highest annual cost of oil imports on record for India. The increase is due to rising global crude oil prices, a weaker rupee, and increased reliance on imports to meet over 82% of India's oil needs. Higher oil prices are also adding pressure to India's current account deficit, fiscal deficit, and inflation.

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45 views

India's Crude Oil Import Bill To Peak at Record $125 BN in Current Fiscal: Oil Ministry

India's crude oil import bill is projected to reach a record $125 billion in the current fiscal year ending March 2019, a 42% increase from the previous year. This would be the highest annual cost of oil imports on record for India. The increase is due to rising global crude oil prices, a weaker rupee, and increased reliance on imports to meet over 82% of India's oil needs. Higher oil prices are also adding pressure to India's current account deficit, fiscal deficit, and inflation.

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Copyright
© © All Rights Reserved
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India’s crude oil import bill to peak at

record $125 bn in current fiscal: Oil


ministry
A detailed ETEnergyworld analysis of historic data shows this would be the highest-ever
annual cost of oil imports for India in the recent pastBilal Abdi | ETEnergyWorld |
Updated: October 22, 2018, 19:11 IST
Newsletter A A
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New Delhi: The ongoing historic surge in the global benchmark crude oil rates, coupled with
a depreciating Rupee against the Dollar and increased reliance on imports, is likely to push
India’s crude oil import bill higher by a whopping 42 per cent to $125 billion or Rs 881,282
crore in the current financial year ending March 2019.

A detailed ETEnergyworld analysis of historic data shows this would be the highest-ever
annual cost of oil imports for India in the recent past (See table).

“The import bill of crude oil is estimated to increase by 42 per cent from $88 billion in 2017-
18 to $125 billion in 2018-19 considering the Indian basket crude oil price of $77.88/bbl and
$/Rs exchange rate of 72.22 for the balance part of the year,” Petroleum Planning and
Analysis Cell (PPAC), the oil ministry’s technical arm, said in a report.

In volume terms, the country’s crude oil imports are set to rise 3.72 per cent to 228.6 MT in
the current fiscal from 220.4 MT last financial year. Data shows crude oil import bill during
the first six months (April-September) of the current fiscal had increased 56.11 per cent to
$58.7 billion. In volume terms, the oil imports rose 5.80 per cent to 113 Million Tonne (MT).

Before this, the highest peak of annual crude oil imports for India was witnessed in 2013-14
when the Indian basket of crude oil averaged $105.52 per barrel. The country had imported
189.23 MT of crude oil then, valuing around Rs 864,875 crore.

India meets over 82 per cent of its crude requirement through imports and has been facing the
onslaught of rising crude rates and Rupee depreciation which have been adding pressure on
the Current Account Deficit (CAD), fiscal deficit and inflation.

The retail prices of petrol and diesel in India are linked to international fuel prices which are
impacted by the supply-demand dynamics of the respective fuels but closely trail global
crude oil prices.

Increase in crude oil and petroleum product prices, coupled with the increase in taxes levied
by the centre and state governments, have resulted in domestic fuel prices breaching record
highs in the last two months.

The centre had cut the excise duty on petrol and diesel last month by Rs 1.50 per litre to bring
relief for consumers. The cut in excise duty is set to impact the government’s revenue by Rs
10,500 crore in the current financial year.

Moody's Investors Service had last month said higher oil prices and robust non-oil import
demand might widen the CAD to 2.5 per cent of the Gross Domestic Product in the current
fiscal from 1.5 per cent in 2017-18.

The agency also cautioned that India might breach the 3.3 per cent fiscal deficit target for the
current financial year, primarily due to higher oil prices, which would add to short-term fiscal
pressure.

The Union budget for 2018-19 had allocated Rs 24,933 crore as petroleum subsidy for the
current fiscal, a mere 2 per cent increase over the Revised Estimate of Rs 24,460 crore for
2017-18.

Moody’s had earlier said that the surge in international oil prices would result in the
country’s petroleum subsidy ballooning to Rs 53,000 crore.

India's central bank Reserve Bank of India (RBI) recently said the country’s headline
inflation is likely to face upside risks over the rest of the year from a number of sources,
warranting continuous vigil and a readiness to head-off those pressures from getting
generalised.

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