India’s crude oil import bill nearly doubled to $119 billion in the fiscal year ended March 31 as energy prices soared around the world following the return of demand and the war in Ukraine.
India, the world’s third largest oil consuming and importing nation, spent US$119.2 billion in 2021-22 (April 2021 to March 2022), up from US$62.2 billion in the previous fiscal year, according to data from the Department of Oil Petroleum Planning & Analysis Cell (PPAC).
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In March alone, when oil prices soared to a 14-year high, it spent $13.7 billion. This compares to spending of $8.4 billion in the same month last year.
Oil prices started to rise from January and prices surpassed $100 a barrel the following month before hitting $140 a barrel in early March. Prices have since declined and are now around $106 a barrel.
According to the PPAC, India imported 212.2 million tonnes of crude oil in 2021-22, up from 196.5 million tonnes in the previous year. However, this was less than the pre-pandemic imports of 227 million tonnes in 2019-20. Spending on oil imports in 2019-20 was $101.4 billion.
The imported crude is processed at oil refineries into value-added products like gasoline and diesel before being sold to cars and other consumers.
India, which is 85.5% dependent on imports to meet its crude oil needs, has excess refining capacity and exports some petroleum products, but is lacking in production of cooking gas LPG, which is imported from countries like Saudi Arabia.
The nation consumed 202.7 million tonnes of petroleum products in 2021-22, up from 194.3 million tonnes in the previous fiscal year, but less than the pre-pandemic demand of 214.1 million tonnes in 2019-20.
Import of petroleum products in fiscal year 2021-22 was 40.2 million tons worth US$24.2 billion. On the other hand, 61.8 million tons of petroleum products were also exported for $42.3 billion.
Also, India spent US$11.9 billion to import 32 billion cubic meters of LNG in 2021-22. This compares to $7.9 billion spent importing 33 billion cubic meters of gas in the previous fiscal year and $9.5 billion spent importing 33.9 billion cubic meters in 2019-20 .
The net import bill for oil and gas, after accounting for exports, was $113 billion, up from $63.5 billion in 2020-21 and $92.7 billion in 2019-20.
India had spent US$62.2 billion importing 196.5 million tonnes of crude in the previous fiscal year 2020-21, when global oil prices remained subdued in the wake of the COVID-19 pandemic.
Higher crude oil import bills are likely to affect macroeconomic parameters.
The country’s import dependency has increased due to a steady decline in domestic production. The nation produced 32.2 million tons of crude in 2019-20, which fell to 30.5 million tons the following year and 29.7 million tons in FY22, PPAC data showed.
According to the PPAC, India’s oil import dependency was 85% in 2019-20, falling marginally to 84.4% the following year before increasing to 85.5% in 2021-22.
