Some think tanks believe the bill could go up further if crude oil and petroleum products continue to get dearer at the present rate. Crude-oil prices have doubled since January, when the prevailing rates were roughly $9 a barrel. Petroleum product prices have increased by more than 30 per cent since March, when crude prices turned the corner at $11 a barrel.

By more conservative estimates, the import bill is expected to touch $9.8 billion by March end or $0.5 billion more than the all-time high of $9.32 billion in 1996-97. That year, crude-oil prices were steep at $18 a barrel. This year crude rates have already crossed the $19.5 a barrel in West Asia and $20 a barrel in the North Sea. The West Texas Intermediate (WTI) crude crossedthe $21 a barrel mark last week.

Soaring oil prices will push up the import bill this year, much the same way low oil prices had kept it on reins despite growth in the volume of imports last year. The country imported altogether 57 million tonne of crude oil and petroleum products last year for $7.5 billion. The year before, in 1997-98, the Oil Coordination Committee had paid out almost as much ($7.39 billion) for 53 million tonne of oil imports.

The fast soaring crude-oil price coincides with a nearly 40 per cent growth in India's oil refining capacity. After the Panipat refinery went on stream earlier this year, the cumulative refining capacity of all the 15 refineries in the country was 67 million tonnes.

Since then Reliance Petroleum has commissioned its giant refinery at Jamnagar, estimated to have a capacity to process 27 million tonne of crude. The Mangalore Refinery and Petrochemicals Limited (MRPL) is expanding capacity by another six million tonne. The three-million-tonne Numaligarh Refinerywould go on stream soon.

The Oil Coordination Committee is known to have budgeted for 28 million tonne of additional crude imports this year. Reliance Petroleum alone will require 21 million tonne of crude oil for three quarters of this year.

Insight

Considering the high prices of crude oil and the commissioning of refineries, it was expected that the oil import bill would touch an all-time high.

However, there will be some relief as imports of petroleum and petrochemical products are likely to fall drastically. In fact, diesel, the most favourite fuel in India, is no longer expected to be imported. It is because of this reason and the fact that exports are doing very well that the rupee is holding its ground against the dollar, in spite of the burgeoning oil import bill.

Shishir Asthana