The oil import bill for the current fiscal is set to jump 27 per cent to $112 billion because of a spike in global crude prices and the depreciation of the rupee, according to the latest estimates.
The import bill in the next fiscal could increase further, if the geopolitical situation worsens.
“The import bill of crude oil is estimated to increase 27 per cent to $112 billion in 2018-19 from $88 billion in 2017-18 considering the actuals up to December 2018 and the Indian basket of crude oil price at $57.77/bbl and exchange rate at Rs. 70.73/$ for January 2019-March 2019,” according to the latest oil ministry document.
The price of Brent crude averaged $57.39 per barrel during December 2018 against $64.74 per barrel during November 2018 and $64.19 per barrel during December 2017. The Indian basket crude price averaged $57.77 per barrel during December 2018 against $65.40 per barrel during November 2018 and $62.29 per barrel during December 2017, it added.
India, which imports over 80 per cent of its oil , spent $87.7 billion on importing 220.43 million tonnes (mt) of crude in 2017-18. For 2018-19, the imports are set at almost 227mt.
According to the recent forecast by the US Energy Information Administration’s short-term energy outlook, Brent crude oil prices will average to $73.7 per barrel in 2019.
Analysts have estimated the rupee could average around Rs 71 to the dollar in 2019. The average pricing has been arrived at assuming the global situation does not worsen drastically.
However, there is growing tension in Latin America with the US imposing sanctions on Venezuela. Moreover, the exemption granted to India and seven other countries to import crude from Iran would end next month, unless Washington extends the deadline.
The country is scouting for more oil by widening its purchase basket, setting up strategic reserves, entering into strategic understanding as a key buyer of crude globally and pushing for the end of Asian premium.
Saudi Arabia’s crown prince Mohammed bin Salman’s visit to the country this week is likely to see some positive engagement, including long-term contracts for crude import.
