India paid an additional ₹2.02 lakh crore for crude oil imports in April-June quarter of the current fiscal year despite import volumes declining by 4.5%, as the West Asia war pushed up international prices.
The country’s crude import bill jumped about 77% to ₹4.64 lakh crore during April-June FY27, from ₹2.62 lakh crore in the corresponding quarter last year, according to provisional data from the Petroleum Planning and Analysis Cell.
Analysts reckon that if the Indian crude basket averages $90/barrel through the year, the import bill in rupee terms could rise over 50% year-on-year. Even though the West Asia conflict has escalated recently with both the US and Iran backtracking on the ceasefire deal, crude prices have remained relatively range-bound.
The threat of an import cost spiral is also mitigated to an extent by diversification of India’s crude sourcing beyond the Strait of Hormuz. The average landed price of imported crude had climbed to around $113 a barrel in Q1FY27, compared with nearly $67 a barrel in the year-ago quarter.
India imports around 1.8-2 billion barrels of crude annually, implying that every $1-a-barrel increase can add up to Rs 13000 crore to the annual import bill.
“If the Indian crude basket averages around $90 a barrel through the year, the country’s annual crude import bill could rise to ₹16-17 lakh crore (from Rs 10.9 lakh crore in FY26), significantly increasing pressure on the trade and current accounts, inflation and the rupee,” said Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Ltd.
If crude averages $100-105 a barrel and volumes do not decline materially, the FY27 import bill could reach $190-210 billion,
In dollar terms, the bill surged 61.2% year-on-year to $49.8 billion, from around $30.9 billion, implying that India paid nearly $18.9 billion more for crude during the quarter even as purchases declined. The price shock fed into domestic inflation. Wholesale fuel and power inflation stood at 24.89% in April, accelerated to 30.3% in May and remained elevated at 27.4% in June.
Crude import volumes fell 4.5% to 59.8 million tonnes in June quarter, equivalent to around 438 million barrels, from 62.1 million tonnes, or nearly 455 million barrels, a year earlier. The decline of 2.3 million tonnes translates into about 16.8 million fewer barrels.
The quarterly increase sharply reversed the relief seen in FY26, when India imported more crude but paid less. Crude imports rose to 245.8 million tonnes in FY26, from 243.2 million tonnes in FY25, while the import bill declined to over $122 billion, from $137.17 billion.
In rupee terms, the annual crude bill fell by about ₹68,370 crore to ₹10.92 lakh crore in FY26, from ₹11.61 lakh crore in FY25. The additional ₹2.02 lakh crore paid in the first quarter of FY27 alone was nearly three times the entire saving recorded during the previous financial year.
The impact extended across India’s energy trade. After accounting for crude oil, liquefied natural gas and petroleum product imports, along with fuel exports, the country’s net oil and gas import bill rose 45.3% to $44.9 billion during April-June.
LNG imports declined 8.6% to 7,674 million standard cubic metres, from 8,396 mscm in the corresponding quarter last year. However, the LNG import bill increased nearly 6% to $3.6 billion, reflecting higher international prices.
Petroleum product imports contracted almost 42% to 7.1 million tonnes, as supplies of key products imported by India, including LPG, were affected by the West Asia war. In value terms, the decline was narrower at 27.6%, with the import bill at $4.2 billion because of elevated prices.
Petroleum product export volumes also fell by about a fourth to 11.3 million tonnes, from 15 million tonnes, as domestic fuel supplies were prioritised amid the global supply squeeze. Export earnings, however, increased nearly 40% due to higher international product prices.
