India’s crude oil import bill to increase by 25% in 2017-18

The Dollar Business Bureau

India’s crude oil import bill is expected to increase by 25% to $87.7 billion in the current fiscal of 2017-18, which closes on this weekend as there is a surge in the global oil prices. 

In the month of February alone, India’s oil import bill surged by 28% to $8.1 billion as compared to the same month last year, according to the latest data of the Ministry of Petroleum and Natural Gas.

For the current financial year, the imports of crude oil are pegged at 219.15 million tonnes for $87.725 billion (about Rs.5.65 lakh crore), as per the latest data available from Petroleum Planning and Analysis Cell (PPAC), an arm of Petroleum Ministry.

The country’s crude oil imports were 213.93 million tonnes in the fiscal of 2016-17 for $70.196 billion (about Rs.4.7 lakh crore). 

During April to February of current fiscal, India’ crude oil imports stood at 195.7 million tonnes for $63.5 billion. 

The crude oil basket that India buys averaged $55.74 per barrel in the 11-month period of 2017-18 period as compared to $47.56 per barrel in the entire 2016-17 fiscal and $46.17 a barrel in 2015-16. 

“April-February 2017-18 crude oil imports are based on actuals and for March 2018, crude oil imports are estimated at crude oil price $65 per barrel and exchange rate of Rs.65 to a US dollar,” said PPAC.

A change in every dollar per barrel crude oil prices has an impact of Rs.823 crore ($0.13 billion) on the country’s import bill. Similarly, it also impact when there is fluctuation in the currency exchange rate by Re.1 per US dollar, it added.

India’s crude oil output was almost stagnant at 32.6 million tonnes in the period April-February 2017-18. The production was 36 million tonnes in entire 2016-17 fiscal and 36.9 million tonnes in 2015-16.

On the other hand, domestic consumption of crude oil has been on a rise. The consumption has increased to 194.6 million tonnes in 2016-17 from 184.7 million tonnes in 2015-16. It was 186.2 million tonnes in 11-month period of 2017-18, as per the PPAC. 

India has to depend on imports to meet its 80% of crude oil requirements.