'India expects to save $17 bn on oil prices fall'

Written by Agencies | New Delhi, August 31: | Updated: Aug 31 2008, 19:14pm hrs
India is expected to save about USD 17 billion this fiscal on crude oil import bill due to fall in crude oil prices, currently hovering between USD 110-120 per barrel after nearly touching USD 150 per barrel mark, a study said.

According to the industry body Assocham's Eco Pulse study on 'Crude Economics', the oil import bill for the current fiscal would have soared to USD 125 billion had crude oil prices remained at USD 145 per barrel level.

However, with the reversal in price movement, the import bill for crude oil would be restrained to USD 108 billion, it said.

Although, experts are still not sure whether the crude price decline would sustain in coming months, but so far it has shed almost 25 per cent after peaking to an all time high of USD 147.27 per barrel in July this year.

The study noted that oil prices have nosedived mainly on account of correction in demand, easing supply conditions and stronger US dollar.

The demand in the US, the biggest oil consumer has fallen sharply from 20.7 million barrels per day (mbpd) in 2007 to 19.88 mbpd in the first quarter of 2008, the chamber said.

In April-June this year, India's oil import bill stood at 25.5 billion dollars against 17 billion dollars during the corresponding period last year.

Fall in oil import bill will also help the Government to bridge the trade deficit which rose to 30.4 billion dollars in the first three months of this fiscal.