The softening of global crude oil prices in recent months has led to India’s oil import bill shrinking on a year-on-year basis in September, October and November, despite rising import volumes in each of these months, the latest petroleum ministry data showed. This is in contrast to the increase in oil import prices in the first five months of the current financial year compared to the same month of the previous financial year.
A fall in international oil prices and a fall in India’s oil import bill due to heavy dependence on oil imports are positive for the country. The latest government data shows that India’s dependence on imported crude oil stood at 88.1 percent during April-November. Oil and gas imports account for the largest share of India’s overall merchandise import bill.
Heavy dependence on imported crude oil makes the Indian economy vulnerable to global oil price volatility, besides affecting the country’s trade deficit, foreign exchange reserves, rupee exchange rate and inflation. The government wants to reduce India’s dependence on imported crude oil, but the slowdown in domestic oil production has been the biggest obstacle due to the ever-increasing demand for petroleum products.
India’s oil imports in value terms fell 9 percent year-on-year to $31.2 billion in the September-November period, while import volume rose 4.4 percent to 57.2 million tonnes, an analysis of provisional oil industry data showed. Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Oil. Import prices were lower by 13 percent in November, 10.9 percent in October and 2.8 percent in September compared to the corresponding months of the previous financial year. On the other hand, the import volume increased by 2.7 percent in November, 4.3 percent in October and 6.3 percent in September.
In the first five months of the current financial year (April-August), cumulative oil imports in value terms rose 14.2 percent year-on-year to $60.3 billion, while volume rose just 2.6 percent to 100 million tonnes.
Overall, in the first eight months of FY25, oil import volume rose 3.5 percent year-on-year to 159.4 million tons, while the value of those imports rose 5 percent to $91.8 billion from $87.4 billion last April-November. Last fiscal year. If the difference in import volumes and prices seen in September-November continues in the coming months, the total oil import bill for the entire financial year 2024-25 could be lower on a year-on-year basis despite a rise in imports. Volumes.
Oil prices have been under pressure in international markets for several months, mainly due to softening demand from China, the recent strengthening of the US dollar that will reduce demand as dollar-denominated commodities become more expensive, and concerns about global economic growth. has been
The price of global benchmark Brent crude fell from around $91 a barrel in early April to $71 a barrel by the end of November. The price of the Indian crude oil basket fell from $89.44 per barrel in April to $73 per barrel in November. The Indian basket of crude oil represents a derivative basket consisting of sour grade and sweet grade crude processed at Indian refineries in the ratio of 78.50 : 21.50.
| Rising Divergence: Volume of Oil Imports, Price to Date in FY25 | ||
| Annual change in (%): | ||
| month | Oil import volume | Oil import price |
| November | 2.7 | -13.0 |
| October | 4.3 | -10.9 |
| September | 6.3 | -2.8 |
| August | 6.4 | 6.4 |
| July | -0.5 | 9.6 |
| June | -5.6 | 11.0 |
| may | 5.8 | 24.5 |
| April | 7.0 | 19.3 |
| Source: PPAC | ||
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