Key Highlights of India’s Oil Import Scenario

Key Highlights of India’s Oil Import Scenario

Subject: Economy

Sec: External Sector

• Reduction in Import Bill:
• India’s crude oil import bill witnessed a significant decline of 16% in the fiscal year ended March 31, attributed to lower international prices.
• Despite importing a similar volume of crude oil as the previous fiscal year, India paid $132.4 billion for imports in FY24, compared to $157.5 billion in FY23.
• Continued Dependence on Overseas Suppliers:
• Despite the reduction in import bill, India’s dependency on overseas suppliers reached a new high.
• Import dependence for crude oil surged to 87.7% in FY24, up from 87.4% in the previous fiscal year, highlighting the nation’s heavy reliance on imports to meet its energy needs.
• Stagnant Domestic Production:
• India’s domestic crude oil production remained nearly unchanged at 29.4 million tonnes in FY24.
• This stagnation in domestic production contributes to the country’s increasing reliance on imported oil.
• Import of Petroleum Products and LNG:
• Apart from crude oil, India imported petroleum products like LPG, spending $23.4 billion on 48.1 million tonnes of imports.
• Additionally, the country imported 30.91 billion cubic meters of LNG, costing $13.3 billion, in FY24.
• The import of LNG experienced a decrease compared to the previous fiscal year due to the price shock caused by geopolitical events.
• Net Import Bill and Trade Balance:
• Petroleum imports accounted for 25.1% of India’s gross imports, while petroleum exports represented 12% of the country’s gross exports in FY24.
• Rising Fuel Consumption:
• India’s fuel consumption witnessed a notable increase of 4.6% to a record 233.3 million tonnes in FY23.
• This upward trend in fuel consumption reflects the country’s growing energy demand and economic activity.
• Surplus Refining Capacity:
• Despite challenges in crude oil production, India maintains surplus refining capacity, enabling the export of petroleum products like diesel.
• This surplus capacity enhances India’s position in the global refining industry, contributing to its energy security strategy.