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Indias monthly oil import bill growth at a year-high

New Delhi: The recent massive rise in global crude oil prices has now started inflating the oil import bill for India that meets 80 percent of its crude requirement through inbound shipments. January’s oil import cost ballooned by a whopping 46 percent to land at $9.6 billion as against $6.6 billion in the same month last year -- the highest monthly increase in the past year. 

The huge jump in the value of oil imports is attributed to a 15 percent rise in oil import volumes and a 26 percent increase in the average global crude price. A ballooning oil import bill jacks up domestic retail prices of automobile fuels, petrol and diesel, apart from impacting the government’s petroleum subsidy outgo and also the country’s Current Account Deficit. 

The overall oil import bill for January, including petroleum products, rose 43 percent to $10.80 billion as compared to the same month last year. “In this connection, it is mentioned that the global Brent prices ($ per barrel) have increased by 25.69 percent in January 2018 vis-à-vis January 2017 as per World Bank commodity price data (the pink sheet),” the commerce ministry said in a statement.

According to Oil Ministry’s statistical arm Petroleum Planning and Analysis Cell (PPAC), India’s crude oil import bill is estimated to increase 25 percent to $88 billion for the financial year 2017-2018 as compared to $70 billion recorded in the previous financial year of 2016-2017.

Ind​ia’s ballooning oil import bill also led to the country’s trade deficit shooting up to a 56-month high of $16.3 billion in the month of January, primarily due to a surge in crude oil and precious stone imports, data released by Commerce Ministry showed.

India imported 20,115 MT of crude oil in January 2018, a 15 percent increase over 17,446 MT imported in the corresponding month a year ago. The Indian basket of crude oil increased 24 percent to $67 per barrel in Jan 2018 as compared to an average of $ 54 per barrel in January 2017.