India’s crude oil import bill has increased by 61% to $49.8 billion in the June quarter (April-June). The special thing is that during this period, India purchased less crude oil as compared to last year, but due to high oil prices in the international market, the expenditure on imports increased significantly.
According to the data of Petroleum Planning and Analysis Cell (PPAC), India imported 59.8 million tonnes of crude oil in the April-June quarter, whereas this figure was 62.6 million tonnes in the same three months last year. That means the quantity of imports declined by about 4%, but the total bill increased by 61%. If we talk about the month of June only, India imported 18.9 million tonnes of crude oil, which is 7% less as compared to June last year. Despite this, the import bill for June increased by 48% to $14.7 billion.
Why did the oil import bill increase?
The biggest reason for increasing import bill was the sharp rise in the prices of crude oil in the international market. During April and May, the price of Brent crude oil reached above $ 100 per barrel several times. According to experts, oil prices rose due to the increasing military tension between America and Iran and the closure of the Strait of Hormuz. This route is considered one of the most important oil transportation routes in the world. Any kind of disruption here impacts the oil market of the entire world.
Ups and downs continued for three months
In April, the price of Brent crude fell to around $ 90 per barrel after news of the first ceasefire, but due to increasing tensions at the end of the month it reached above $ 126 per barrel. Even in May, prices remained above $110 per barrel for a long time. The average price did come down to $83.22 per barrel in June, but the overall impact of the quarter was clearly visible on India’s import bill.
What will be the impact on India’s economy?
India imports more than 85% of its crude oil requirement from abroad. Therefore, even a small increase in oil prices has a big impact on the country’s economy. If crude oil prices remain like this for a long time, it may increase India’s import bill, current account deficit and inflation. India imports about 1.8 to 2 billion barrels of crude oil every year. In such a situation, if the price of oil increases by 1 dollar per barrel, then the country’s import bill can increase by about 2 billion dollars per year.
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