oil import: India’s oil import bill will hit $100 billion in current fiscal year
India’s crude oil import bill is expected to exceed $100 billion in the current fiscal year ending March 31, nearly double its spending from last year, as international prices oil are trading at seven-year highs. India spent $94.3 billion in the first 10 months (April-January) of the current fiscal year which started on April 1, 2021, according to data from the Petroleum Planning & Analysis Cell (PPAC) of the petroleum ministry.
It spent $11.6 billion in January alone when oil prices began to soar. That compares to spending of $7.7 billion in the same month last year.
Oil prices surged above USD 100 a barrel in February and at this rate India, which imports 85% of its crude oil needs, is expected to nearly double its import bill to USD 110-115 billion. USD by the end of the fiscal year. 2021-2022.
Imported crude oil is processed into value-added products like gasoline and diesel at oil refineries, before being sold to automobiles and other users. India has excess refining capacity and exports some petroleum products, but lacks production of LPG cooking gas, which is imported from countries like Saudi Arabia.
Imports of petroleum products in April-January of the 2021-22 financial year were 33.6 million tons worth $19.9 billion. On the other hand, 51.1 million tons of petroleum products were also exported for 33.4 billion dollars.
India had spent $62.2 billion to import 196.5 million tonnes of crude oil in the previous fiscal year 2020-21 when global oil prices remained low following the COVID pandemic. -19.
In the current year, it has already imported 175.9 million tons of crude oil.
In the pre-pandemic fiscal year 2019-20, the world’s third largest energy importer and consumer spent $101.4 billion to import 227 million tonnes of crude oil.
Brent spot prices hit an over-seven-year high of $105.58 a barrel on Feb. 24 on fears of supply disruptions following Russia’s invasion of Ukraine. It then fell below USD 100 as those fears faded as the West kept energy trading away from sanctions on Russia.
The rise in the crude oil import bill should weigh on macroeconomic parameters.
The country’s dependence on imports has increased due to a steady decline in domestic production. The country produced 30.5 million tonnes of crude oil in 2019-20, which fell to 29.1 million tonnes the following year.
In the current fiscal year, it has produced 23.8 million tonnes of crude oil so far, compared to 24.4 million in the first 10 months of 2020-21. The target for 2021-22 is 26.1 million tonnes, according to cMYP data.
India’s self-sufficiency to meet oil needs was 15% in 2019-20, which rose to 15.6% in the following fiscal year, but fell to 14.9% in the second year. exercise in progress.
India’s import bill for liquefied natural gas (LNG) also increased to $9.9 billion in the 10-month period of the current fiscal year, significantly higher than the 6, $2 billion in imports in the same period last year, according to cMYP data. .
Global LNG prices have skyrocketed in recent months, leading to more expensive gas imports.
In 2020-21, India spent $7.9 billion to import 33 billion cubic meters of LNG. In the previous fiscal year, it spent $9.5 billion on importing 33.88 billion cubic meters.
In the current fiscal year, India imported 26.78 billion cubic meters of gas, the majority of it on long-term contracts linked to oil prices.
Petronet LNG Ltd imports gas in liquid form (LNG) from Qatar and Australia, while state-owned GAIL (India) Ltd has long-term import contracts with Russia and the United States.