In rupee terms, cost of crude imported in the period was 57.5% lower year on year (YoY) to Rs 1.33 lakh crore.
with the resumption of economic activities in the country, it is expected that the situation for the natural gas industry will improve soon. The current levels, however, remain below the pre-COVID figures.
Crude import bill in the first five months of the current financial year fell 60.7% annually to $17.7 billion, even though the volume of crude oil sourced from outside was only 22% lower than that in the same period a year ago. In rupee terms, cost of crude imported in the period was 57.5% lower year on year (YoY) to Rs 1.33 lakh crore. According to the government’s petroleum planning and analysis cell, 73.8 million tonnes (MT) of crude oil have been imported in the country in the April-August period this year.
The price of the Indian crude oil basket, which stood at an average of $64 a barrel in January, is currently trading around $42/barrel, after it had plunged to around $20 in April. India imports close to 85% of its annual crude oil requirements, and the massive oil bill (it makes up for 21% of the country’s imports) is the biggest driver of the country’s trade deficit, and consequently current account deficit. Benefits of lower prices are seen to sustain going forward as Saudi Arabia, Iraq, UAE and Kuwait — which account for 54% of India’s crude imports — have recently reduced crude oil rates for October shipments.
The country’s dependence on purchases from overseas has only risen in recent years, as domestic production falters in the absence of adequate incentives. However, crude oil imports are subdued this year because of the low demand of petroleum products amid the sporadic lockdowns to contain the spread of coronavirus. Consumption of diesel in August was 12% lower than July, while on a y-o-y basis, sales were down 20.7% to 4.9 MT in the month. While 15.2 MT of crude oil was imported in August —23% lower, annually — domestic crude production recorded a 6% annual fall to 2.6 MT in the month.