NEW DELHI: India's crude oil import bill will likely swell 15% to $81 billion in the current fiscal year as prices soar amid output cuts led by OPEC and Russia.
The volume of crude import would remain little changed at 213.5 million metric tonnes in 2017-18 but the value would jump to $81billion from $70 billion in the previous year, according to an estimate by the Oil Ministry.
In rupee terms, the value is estimated to go up to Rs 5.2 lakh crore from Rs 4.7 lakh crore.
The import projection includes actual data for April-November and estimates for the balance four months of 2017-18 assuming crude oil at $55 per barrel and exchange rate of `65 a dollar.
Alteration in the price of crude oil by a dollar changes net import bill by Rs 3,296 crore, or $0.51 billion. One Rupee variation in exchange rate alters import bill by Rs 2,789 crore, or $0.43 billion. India basket of crude oil averaged $52.55 a barrel during April-November, leaping from the 2016-17 average of $47.56 a barrel. In 2015-16, the average price was $46.17/barrel.
After collapsing in mid-2014 due to a supply glut, crude prices have remained low for three years. But in the last six months, an extended agreement to cut output by OPEC and Russia, the key oil producers, has somewhat helped recover price. Along with a healthy demand, the output cut has pushed up crude prices in the past six months by more than 40% to $67/barrel.
India imports 82% of its oil requirement and a surging price is seen as negative for the country as it boosts inflation, reduces scope for interest rate cut, raises fuel subsidy burden and can hurt overall economic growth.
Between April and November, crude oil import marginally increased by 0.6%.
The share of OPEC in crude imports fell to 82.4% from 87.9% in the previous year, as supplies from US, Canada, and Russia increased.
Source: economictimes.indiatimes.com