India’s Crude Oil Import Bill Nearly Doubles to $119 Billion in Fiscal Year 2021-22
New Delhi:
India’s crude oil import bill nearly doubled to $119 billion in the fiscal year ended March 31, as energy prices rose worldwide following the return of demand and the war in Ukraine.
India, the third largest oil consuming and importing country in the world, spent $119.2 billion in 2021-2022 (April 2021 to March 2022), up from $62.2 billion in the previous fiscal year, according to data from the Petroleum Planning & Analysis Cell of the Ministry of Oil. (PPAC).
It spent $13.7 billion in March alone, when oil prices hit their 14-year high, compared with $8.4 billion in spending in the same month last year.
Oil prices started to rise in January and crossed $100 a barrel the following month before reaching $140 a barrel in early March. Prices have since fallen and are now around $106 a barrel.
According to PPAC, India imported 212.2 million tons of crude oil in 2021-22, compared to 196.5 million tons in the previous year. However, this was lower than the pre-pandemic imports of 227 million tons in 2019-20. Expenditure on oil imports in 2019-20 was $101.4 billion.
The imported crude oil is converted into value-added products such as gasoline and diesel in oil refineries before being sold to cars and other users.
India, which is 85.5 percent dependent on imports to meet its crude oil needs, has a surplus of refining capacity. It exports some petroleum products, but is short on the production of cooking gas LPG, which is imported from countries such as Saudi Arabia.
The country consumed 202.7 million tons of petroleum products in 2021-22, up from 194.3 million tons in the previous fiscal year, but lower than pre-pandemic demand of 214.1 million tons in 2019-20.
Imports of petroleum products in fiscal year 2021-2022 were 40.2 million tons worth $24.2 billion. On the other hand, 61.8 million tons of petroleum products were also exported for $42.3 billion.
In addition, India has also spent $11.9 billion on imports of 32 billion cubic meters of LNG in 2021-22. This compares with $7.9 billion spent on imports of 33 bcm of gas in the previous fiscal year and $9.5 billion on imports of 33.9 bcm in 2019-20.
After adjusting for exports, the net oil and gas import bill came in at $113 billion, up from $63.5 billion in 2020-21 and $92.7 billion in 2019-20.
India had spent $62.2 billion importing 196.5 million tons of crude oil in the previous fiscal year 2020-21, as global oil prices remained low in the wake of the COVID-19 pandemic.
A higher crude oil import bill is expected to affect macroeconomic parameters.
The country’s import dependency has increased due to a steady decline in domestic production. The country produced 32.2 million tons of crude oil in 2019-20, which fell to 30.5 million tons the following year and 29.7 million tons in FY22, the PPAC data showed.
According to PPAC, India’s reliance on oil imports was 85 percent in 2019-20, declining marginally to 84.4 percent in the following year before rising to 85.5 percent in 2021-22.
