Saturday, May 21, 2022

Rising crude oil prices swell India’s import bill by two times

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  • At US$82.4 billion, the crude oil import bill for the nine-month period has already surpassed the total import bill for the last financial year
  • Apart from crude oil, surging LNG prices have also swelled India’s import bill by 61 percent in the April-December period year-on-year

New Delhi: India’s crude oil import bill has more than doubled in the April-December period of the current financial year at US$82.4 billion, registering an increase of 108.08 percent year-on-year, fresh data sourced from the Petroleum Planning and Analysis Cell (PPAC) showed. For the corresponding period of the previous fiscal, India’s crude oil import bill stood at US$39.6 billion. The jump has been recorded primarily on account of the rise in global crude oil prices as the volume of imported crude oil has increased only by 9.1 percent during the April-December period of FY22 over the corresponding period of the previous year.

During the said period, petroleum imports accounted for 22.5 percent of India’s gross imports and pushed India’s import dependency of crude oil to 85.1 percent.

Spending on crude oil import so far surpasses FY21 total import bill

At US$82.4 billion, the crude oil import bill for the nine-month period has already surpassed the total import bill for the last financial year. In FY21, India’s crude oil import bill was at US$62.2 billion. The price of Brent crude averaged US$74.10/bbl during December 2021 as against US$81.44/bbl during November 2021 and US$49.86/bbl during December 2020. 

The Indian basket crude price averaged US$73.30/bbl during December 2021 as against US$80.64/bbl during November 2021 and US$49.84 /bbl during December 2020.

LNG import bill rises even as volumes fall

Apart from crude oil, surging LNG prices have also swelled India’s import bill by 61 percent in the April-December period year-on-year. In the nine-month period of FY22, India’s LNG import bill stood at US$ 8.7 billion, up from US$5.4 billion recorded in the corresponding period of the previous fiscal. This was when the cumulative LNG import of 24,468 MMSCM for the current year till December 2021 was lower by 2.8 percent in comparison to the corresponding period of the previous year. India spent US$7.9 billion in 2020-21 and US$ 9.5 billion in 2019-20     on importing LNG. 

Natural gas prices have spiralled in the global market as supply has failed to match demand. Asian LNG prices have hovered above US$30 per mmBtu for months in the spot market. LNG procurement under long-term contracts has also become expensive as these are linked to oil prices that have soared sharply this year.

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