India’s crude import bill increased 10.9% in June to $11.1 billion even as the imports volume declined by 5.6%, data from the Petroleum Planning and Analysis Cell showed. The increase in import bill can be attributed to the lowering of discounts offered by Russia on its crude oil.
The country imported 18.5 million tonnes of crude oil in June compared with 19.6 million tonne in the corresponding period of last fiscal.
Russia has become the top supplier of crude oil to Indian refiners post its invasion of Ukraine. The country imported 2.13 million barrels of crude oil per day from Russia last month, up 7.2% from the previous month, according to the data provided by Kpler. This was the highest since May 2023 when imports from Russia stood at 2.15 million barrels per day.
During the first quarter of the current fiscal, India’s crude oil imports rose by 3% to 62.0 million tonne valued at $37.5 billion, up from $31.5 billion in the year ago period, as per PPAC data. “The rise in crude oil import bill reflects higher crude oil prices as well as lower discount on imports from Russia,” IDFC First Bank said in a note.
During Apr-May, the imputed cost of crude oil from Russia has risen to $84 per barrel, which is similar to the other two key suppliers of crude oil – Iraq ($83/barrel) and Saudi Arabia ($90/barrel), according to the bank. “For the same period in FY24, the discount on Russian crude oil was $12/barrel (on an average vs Iraq and Saudi). As a result, the share of crude oil imports from Russia has reduced to 35% in FYTD25 (Apr-May) in volume terms against 38% in the same period in FY24.”
The country’s dependency on import of crude oil during the first quarter of the current fiscal rose to 88.8%, up from 88.3% in the Apr-Jun quarter of FY24 as the domestic production remained stagnant.
Upstream companies produced 7.3 million tonnes of crude oil during April to June, unchanged from the same quarter last fiscal. In June too, production remained muted at 2.4 million tonne from last year. Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last 10 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.
The government also intends to increase the country’s exploration acreage to 1 million square kilometers by 2030.
The country’s consumption of petroleum products including gasoline, diesel, and jet fuel among others increased to 60.9 million tonnes during the first three months of FY25 from 58.9 million tonnes in the same period last year.