In January , the Indian basket crude averaged $28.08barrel. If crude prices were to increase by one dollar per barrel, net import would swell by $0.16 billion, and if the exchange rate of dollar were to rise by one rupee, it would result in an increase of ` . 541 crore, the PPAC said.
In volume terms, the import of crude oil is estimated to decline marginally to 188.23 million metric tonne (MMT) in the current fiscal year from 189.43 MMT in 2014-15, even though import increased by 4.5% in the April-January period.
India’s crude oil production between April and January fell 1.2% from a year ago, pushing up import dependence to above 80%. During the same period, domestic consumption of petroleum products such as petrol, diesel and cooking gas rose 10%. The country is a net exporter of petroleum products, but a rising domestic demand and lower international prices have slowed exports, which fell 9% in the nine months to end of January.
India has been a big beneficiary of the global oil collapse. Besides slashing the country’s import bill and saving its valuable foreign exchange, the crash in oil prices has helped the country deregulate fuel sales and cut subsidies. Its forex reserves have risen 7% in a year to $350 billion, while the fuel subsidy has fallen . 22,000 crore in April-December from to ` . 76,000 crore in the year-ago period.` Lower fuel prices, higher car sales and rising economic activity have all contributed to a faster growth in fuel consumption in the country , even though the government hasn’t passed on the full benefits of low crude oil prices to consumers by repeatedly raising duties on fuel. Today , a consumer pays about 60% of the retail price of petrol as duties.
The Narendra Modi government wants local crude production to rise quickly so that the country’s import dependence can be slashed by 10% by 2022, but ageing fields, limited exploration activity and low oil prices are becoming a hurdle.
Oil Prices Likely to Remain Low for 3-5 Years: Mukesh Ambani
NEW DELHI Mukesh Ambani, owner of the world’s largest refining complex, on Sunday said global oil prices are likely to remain low for three-five years, benefiting a net importing nation like India. “Well, as we see the situation (oil prices), it’s low for long. And this is really the first time in the world that oil prices have gone down on incremental supply,“ he said to CNN in an interview.
Ambani said there have been spikes in oil prices in past. “But never has it (fallen) because there has been more supply than demand. It’s also the first time that you now have, because of the innovation in the US, large quantities of oil,“ he said.
The US, he said, has gone from less than a million barrels a day to nine million barrels a day of oil production.