India has ramped up its strategic oil reserves since mid-March in view of the slump in crude prices and hopes to fill it to the brim by May-end. Yet, the country’s oil import bill in FY20 could be just a little over $100 billion, much lower than $111.9 billion reported in FY19.
Against the projected $111.3 billion (233 million tonne) for FY20, India imported just $95.5 billion (207 million tonne) of crude oil in April-February of the fiscal, which was even 7.2 per cent lower than in the year-ago period (6.6 per cent lower in rupee term).
Though the March import data have not been officially released yet, according to global oil market research agency Refinitiv, India imported 20.3 MT of crude in the month — the highest monthly import volume since October 2019. Purchases continued at a brisk pace in April too. The monthly average imports in April-February FY20 was 18.8 MT.
Refinitiv said Indian “refiners were among the first to cash in on the low-price environment”, and were “among the first to pick up the extra Middle Eastern (West Asian) barrels”.
India’s crude import bill may decline by 57 per cent to $43 billion in FY21 if the Indian basket price remains subdued at around $25 a barrel through the current fiscal year, in what could give a big relief to the country’s current account. The price of the Indian crude oil basket, which stood at an average of $64 a barrel in January, is now around $20.
Indian basket has fallen 39 per cent month-on-month in March to $33.36 a barrel. Even though currently there is very low demand for petroleum products owing to the lockdown to contain the coronavirus outbreak, Indian refiners have picked up more than usual quantities of crude from global markets, apparently to fill up the storage caverns.
Meanwhile, domestic consumption of petroleum products in FY20 remained flat at 213.7 MT as sales of transportation fuels plummeted in March amid the country-wide lockdown. —FE
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