India’s crude import bill increased 14.7% during the first five months of the current fiscal 2024-25 to $60.6 billion against $52.8 billion in the corresponding period in FY24, data from the Petroleum Planning and Analysis Cell showed. The country imported 101.6 million tonnes of crude oil during April to August, up 3.2% from 98.4 million tonnes in the corresponding period of last fiscal.
In August alone, imports volume and bill rose by 6.4% each to 19.9 million tonnes and $11.6 billion respectively from August last year.
The country’s dependency on import of crude oil during April to August of the current fiscal rose to 88.1%, up from 87.8% in the corresponding period of FY24 amid rising demand and stagnant domestic production.
Upstream companies produced 12.1 million tonnes of crude oil during the period, slightly down from 12.3 million tonnes in the same period last fiscal. In August too, production fell marginally to 2.4 million tonnes from 2.5 million tonnes last year. Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last ten years.
So far, the country’s upstream sector companies have explored only 10% of the sedimentary basin. The government is now aiming to increase the explored area to 16% by the end of 2024 after the end of upcoming rounds of bids under Open Acreage Licensing Program. It also intends to increase the country’s exploration acreage to 1 million square kilometers by 2030.
The government is expected to come out with the bids for oil and natural gas assets under the tenth round of Open Acreage Licencing Policy in the beginning of 2025, according to a senior official of the ministry. The government expects the contracts for the upcoming round and the ongoing 9th round to be signed as per the reforms mentioned in the Oil (Regulations and Development) Amendment Bill, which is expected to be passed in the upcoming winter session of Parliament. Additionally, a few no-go areas may also go under the hammer in the tenth round of the OALP bidding, the official said.
The price of Brent crude averaged $80.91 per barrel during August as against $85.31 per barrel during July 2024 and $86.22/bbl during Aug 2023, as per the data. The Indian basket crude price averaged $78.27/bbl last month as against $84.15/bbl during July and $86.43/bbl during Aug 2023.
Crude prices have been following a downward trend lately owing to weakness in demand from one of the world’s top consumers – China.
Analysts are expecting crude oil prices to edge lower in the medium term due to an expected surplus in the global market by 2025 despite the Organisation of Petroleum Exporting Countries’ decision to continue the voluntary cuts of 2.2 million barrels per day (bpd) till September 2024.