With crude oil prices and demand going up, India’s import bill this financial year could be almost double of last year’s, says a report.
A report in the Business Standard said oil import bill is this year on its way to be the highest in at least three years as the average price has crossed $70 a barrel in 10 months to October. The Indian basket averaged $82.11 per barrel in October, the highest price for the month in five years.
Quoting data from the Directorate General of Commercial Intelligence and Statistics, the report said Iraq remained the top supplier to India till September.
During April-October, 118.5 million tonnes (mt) of crude oil were imported that cost the exchequer $61.1 billion.
In the same period last year, India had imported 104.6 mt, and the import bill of $26.9 billion.
India paid $62.2 billion for crude oil imports in 2020-21.
Prashant Vasisht, vice-president and co-head-corporate ratings at ICRA, is quoted as saying an annual crude oil import bill of around $110 billion is a reversal of the earlier years. It is on expected lines, with the import bill exceeding the FY21 figure in November itself.
This is attributed to Indian basket averaging at $71.56 a barrel in the first seven months of FY22, up from $37.24 a barrel in the same months of FY21. The rupee is also weaker than the last three fiscal years, averaging ₹ 74.05 against a dollar till October.
Vasisht said FY21 was an aberration due to the Covid-19 pandemic lockdowns.
Crude oil prices are expected to remain higher. Even if the OPEC+ decides to increase output, all members will not able to adhere to new goals, which could mean extended pressure on supplies, and higher prices Vasisht said.
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