India’s Import Bill to Fall by ₹1.8 Lakh Crore Amid Lower Global Oil Prices

India, the world’s third-largest oil importer, is likely to gain substantially from the ongoing decline in global energy prices. With crude oil and liquefied natural gas (LNG) forming a major part of its import basket, the softening of prices is projected to bring major fiscal relief, according to a report by ICRA.

Decline in Oil Prices Promises Significant Fiscal Gains

In the fiscal year ending March 31, 2025, India spent $242.4 billion on crude oil imports, meeting over 85% of its domestic requirements. LNG imports added another $15.2 billion to the national bill. However, recent global developments have led to a fall in energy prices. Earlier this week, oil prices dropped to a four-year low of $60.23 per barrel due to rising global supply concerns and uncertain demand. Although prices rebounded to $62.4 per barrel, they still remain nearly $20 below March 2024 levels, when domestic petrol and diesel prices were reduced by ₹2 per litre ahead of the general elections.

ICRA projects that if average crude prices remain in the $60–70 per barrel range through FY2026 (April 2025 to March 2026), India could save ₹1.8 lakh crore on crude oil imports. Additionally, the country may see a ₹6,000 crore reduction in LNG import costs.

Impact on Oil Companies and Broader Economic Indicators

While the lower prices are favourable for the national economy, upstream oil companies are expected to witness a ₹25,000 crore decline in profits before tax for FY2026. Despite this, ICRA expects that the capital expenditure plans of domestic upstream players will not be affected.

Oil marketing companies (OMCS) are projected to maintain healthy marketing margins on automotive fuels. The decline in prices is also expected to reduce under-recoveries on liquefied petroleum gas (LPG), which are typically compensated by government subsidies. This decline will likely support the profitability of downstream firms, especially after the excise duty increases on auto fuels are introduced in April 2025.

The moderation in global crude prices is also expected to lower term LNG prices. ICRA projects that if crude oil prices stay within the $60–70 per barrel range, India could save ₹6,000 crore on LNG imports from Qatar in FY2026 compared to FY2025.

Read More: India’s Edible Oil Imports Hit 4-Year Low

Conclusion

The current downward trend in global oil and gas prices is poised to significantly ease India’s import burden, enhance fiscal stability, and support downstream oil companies. While upstream firms may see reduced profits, the broader economic impact remains largely favourable.

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