India’s crude oil import bill is set to exceed $100 billion in the current fiscal, almost double its spending last year as international oil prices trade at seven-year highs. The country spent $94.3 billion in the first 10 months (April-January), according to data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC).

It spent $11.6 billion in January alone when oil prices had started to surge. This compared with $7.7 billion spending in the same month last year.

In February, oil prices crossed $100 per barrel and going at this rate, India, which imports 85 per cent of its crude oil requirements, is expected to almost double its import bill to $110-115 billion by the end of the fiscal year 2021-2022.

The country has surplus refining capacity and it exports some petroleum products but is short on the production of cooking gas LPG, which is imported from nations such as Saudi Arabia.

Import of petroleum products in April-January of 2021-22 fiscal was 33.6 million tonnes (mt) worth $19.9 billion. On the other hand, 51.1mt of petroleum products were also exported for $33.4 billion.

India had spent $62.2 billion on import of 196.5mt of crude oil in the previous 2020-21 fiscal when global oil prices remained subdued in the wake of the Covid-19 pandemic. In the current year, it has already imported 175.9mt of crude oil.

In the pre-pandemic 2019-20 fiscal, the world’s third largest energy importing and consuming nation had spent $101.4 billion on the import of 227mt of crude oil. Brent spot prices surged to an over seven-year high of $105.58 per barrel on February 24 on fears of supply disruptions after Russia invaded Ukraine.

It has dropped to below $100 thereafter as those fears receded as the West kept energy trade out of sanctions imposed on Russia. Higher crude oil import bill is expected to dent the macroeconomic parameters.

The country’s import dependence has increased owing to a steady decline in domestic output. The nation produced 30.5mt of crude oil in 2019-20, which fell to 29.1mt in the following year.

During the current fiscal, it has produced 23.8mt of crude oil so far compared with 24.4mt in the first 10 months of 2020-21. The target for 2021-22 is 26.1mt, the PPAC data showed.

Self-sufficiency in oil needs was 15 per cent in 2019-20, which increased to 15.6 per cent in the following fiscal but has fallen to 14.9 per cent in the current financial year. Import bill for LNG increased to $9.9 billion in the first 10 months of the current fiscal.