Oil imports will cost 6% of GDP

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India is expected to pay $17 billion more this fiscal towards its oil import bill compared with 2006-07. The sum is about the same as the government’s plan expenditure for the entire transport sector.

According to data forwarded by the petroleum ministry to the finance ministry, the estimated oil import bill for 2007-08 would be around $73.83 billion (Rs 2,98,432 crore), against an actual import bill of $57.28 billion (Rs 2,59,418 crore) in 2006-07.

The annual oil import bill at $74 billion is over 6% of the country’s GDP. The oil economy is therefore a critical component of the annual Budget, which the finance ministry takes into account when deciding receipts and expenditure for the year.

India meets 79% of its crude requirement by way of imports. With international crude prices crossing the $100-a-barrel mark in December 2007, the Indian basket of crude averaged close to $88 a barrel in the same month, and even touched $94.62 a barrel on January 3, against $65 at the start of the fiscal last April.