India’s Crude Oil Import Bill Drops 8.5% in December as Global Crude Prices Soften

India’s crude oil import bill continued to trend lower in December, supported by a sharp correction in global crude prices, even as the country’s fuel consumption and import volumes increased. 

Import Bill Declines Despite Higher Volumes 

According to data from the Petroleum Planning and Analysis Cell (PPAC), India’s crude oil import bill declined 8.5% year-on-year in December.  

The country spent $9.7 billion to import 20.8 million tonnes of crude oil during the month, compared with $10.6 billion for 20.2 million tonnes in December last year. 

For the April-December period of the current financial year, the crude oil import bill fell 11.5% to $90.7 billion, down from $102.5 billion in the corresponding period a year earlier. This reduction came despite crude import volumes rising 3.2% in December and 2.6% during the nine-month period. 

Global Price Correction Drives Savings 

The decline in India’s oil bill was largely driven by softer international crude prices amid an oversupplied global market and subdued demand conditions.  

The Indian basket of crude oil averaged $62.2 per barrel in December, more than $10 lower than the $73.34 per barrel recorded a year earlier. 

Crude oil imports account for nearly one-fourth of India’s total import bill, making price movements a key determinant of the country’s trade balance. 

High Import Dependence Continues 

India’s dependence on imported crude oil remains elevated, with imports meeting about 88.6% of domestic demand during the nine months ended December.  

In addition to crude, the country also imports liquefied natural gas and petroleum products such as LPG, while exporting refined fuels including diesel and petrol. 

The net oil and gas import bill declined 5% year-on-year in December to $9.5 billion. For April-December, the net bill fell 11.7% to $87.7 billion. 

Fuel Consumption Remains Strong 

Domestic fuel demand remained robust, with total consumption rising 5.3% year-on-year in December to 21.74 million tonnes. Growth was led by LPG consumption, which rose 11.2%, followed by petrol at 7.1% and diesel at 5%. 

Read More: India Signs $3 Billion LNG Deal With UAE, Deepens Energy and Defence Ties! 

Conclusion 

Lower global crude prices helped ease India’s oil import burden in December and during the current financial year so far, providing relief to the trade balance despite rising fuel demand and continued high reliance on imported energy. 

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