Despite the volume remaining largely unchanged, India’s crude oil import bill for 2023-24 declined 16% year-on-year to $132.4 billion, primarily because of discounts offered by Russia on its supplies, recent data from the Petroleum Planning and Analysis Cell showed. In FY23, the crude oil import bill stood at $157.5 billion.Russia has emerged as the top supplier of crude to India after the Russia-Ukraine war began.
Following sanctions from the West, Russia started offering discounts on its oil supplies. However, the quantum of discount has fallen – from more than $30 a barrel to $5-6 per barrel at present, according to analysts.India imported 232.5 million tonne of crude oil in FY24, marginally down from 232.7 MT in FY23. However, the country’s import dependency on crude oil rose to 87.7% in FY24, from 87.4% in FY23, owing to higher consumption.India’s consumption of refined oil products touched 233.3 MT in FY24, up 4.6% from 223 MT in FY23. The growth in consumption of major petroleum products such as petrol, high speed diesel, aviation turbine fuel and liquified petroleum gas drove the growth in the previous fiscal.While India continues to rely heavily on imports to meet almost 88% of its requirement, domestic production over the years has remained stagnant.
Indian firms produced 29.4 MT of crude oil in FY24, compared with 29.2 MT in FY23. This is despite the government’s increasing efforts, including opening more acreages for oil and gas exploration, to boost domestic production.Production of ONGC and Oil India was lower than the target in the previous fiscal. ONGC produced 18.1 MT of crude oil, against its target of 19.2 MT. The production was even lower than 18.4 MT for FY23, data showed.Oil India produced 3.3 MT of oil last fiscal, marginally below its target of 3.4 MT, but higher from FY23’s production of 3.2 MT. India’s rising dependency on imports, coupled with muted production. is a cause for concern, especially at a time when the global crude market is witnessing volatility. Crude oil prices have touched $90 per barrel two weeks back and are hovering at around $89 per barrel at present. Analysts believe that price could touch $95-$100 per barrel if there is an escalation in the conflict between Iran and Israel.