Petroleum import costs totaled nearly $24.7 billion in the three months ended June 30, up from $8.5 billion a year earlier, according to government figures. In the June quarter, however, volume growth was modest, with 51.4 million tonnes up 14.7%.
According to the Petroleum Planning and Analysis Cell (PPAC), the petroleum ministry’s official data keeper, India imported a little more than 198 million tonnes of crude worth $62.7 billion in 2020-21.
In the first quarter, the cost of importing crude oil increased by more than 190%.
Petroleum import costs totaled nearly $24.7 billion in the three months ended June 30, up from $8.5 billion a year earlier, according to government figures. In the June quarter, however, volume growth was modest, with 51.4 million tonnes up 14.7%.
The cost of oil imports has grown dramatically, despite the fact that local fuel use remains below pre-Covid levels. According to two individuals familiar with the situation who requested anonymity, the oil import bill is anticipated to reach $100 billion this fiscal year through March.
The oil import bill is forecast to exceed $100 billion this fiscal year through March, with global oil prices unlikely to decline much in the near future and local fuel consumption on the rise as a result of the easing of Covid-related constraints and rising economic activity. The cost of importing crude oil climbed by more than 190% in the first quarter.
Due to partial lockdowns in various states to contain the spread of the second wave of the epidemic, India, which imports more than 80% of the crude oil it processes, saw domestic consumption dip in the June quarter.
Domestic petroleum product consumption declined 9.28% to 17.03 million tonnes in April, according to PPAC. In May, it fell to 15.12 million tonnes before partially recovering to 16.33 million tonnes in June 2021. The second wave hit hardest in the first two months of this fiscal year.
Last week, when announcing the first quarter results of the state-run Indian Oil Corporation (IOC), chairman SM Vaidya remarked that while petrol demand had already approached pre-pandemic levels as people preferred personal automobiles to public transportation, the increase in diesel use was still low.
He anticipates diesel sales to return to pre-pandemic levels by Diwali in November, assuming no more lockdowns as a result of a possible third wave.
High crude oil prices, according to S.C. In Q1FY22, Sharma, an energy expert and former special duty official at the erstwhile Planning Commission, caused a spike in India’s import bill. He pointed out that, compared to the average import price of $44.82 per barrel in FY21, oil import prices in Q1FY22 averaged $67.44 per barrel.
“One of the striking features for future oil prices is likely to be the oil demand spurt globally as economic activities are picking up due to large-scale vaccination. It is also said that the oil demand for India during FY21 was lower by 20 million tonnes compared with FY20, i.e., about minus 10%.
Hence, India’s oil demand may also rise faster during FY22, and beyond to cover up the lost demand during FY21,” Sharma said.
