But in the last few months it has gained sharply. Further, pressure on the rupee could also dent estimates,” said an oil sector analyst asking not to be named as he was still making his calculations on oil imports. India’s import bill nearly halved to $64 billion in FY16 even though the country imported higher 202.4 million tonnes of crude oil for $112..43 a barrel in FY18.After collapsing in mid-2014 due to a supply glut, crude prices remained low for three years.Analysts also expect the rupee to depreciate further, completely changing the oil mathematics for FY19.Its not just higher import bill, but rising crude could also put additional burden of subsidy contribution on state-run upstream companies – ONGC and OIL, and also gas transportation company GAIL.7 billion in FY15.2 million tonnes.This will make oil import bill for FY19 the highest in the five years of the Narendra Modi government and very close to high import bill during UPA-II when the crude oil prices had breached all records to touch close to $140 a barrel mark.As per latest estimates by the oil ministry’s Petroleum Planning and Analysis Cell (PPAC), country’s oil import bill may balloon to $125 billion in FY19, a growth of 42 per cent over $88 billion paid for oil in FY18.In FY17, Iran again became third largest oil supplier to India with its supplies jumping to 27. This compared with import of 189. This PPAC estimate, is based for period between October 2018 and March 2019.
And if exchange rate increases by Re 1 to a dollar, the net import bill rises by Rs 6,639 crore. The benchmark Brent oil price is already higher at $79 a barrel and is expected to start rising again in November China process of molding Suppliers when the US sanctions on Iran comes into effect.17 a barrel in FY16. Iran is pumping nearly 4 million barrels a day of oil since the 2015 nuclear deal with six world powers that lifted crippling sanctions on the country.New Delhi: The government finally acknowledges that rising oil prices and depreciating rupee would severely dent the government resources, putting further pressure on deteriorating deficit position and creating hurdles in the path a faster economic recovery.1 million tonnes of crude oil in that financial year. Already, oil marketing have been asked to absorb RS 1 increase in retail price of petrol and diesel, an exercise that could severely dent their profits. Oil import bill could increase further as high crude price will rise further during the rest of the five months of the year, especially after the US sanctions on Iran becomes a reality.The Centre has so far maintained that though rising oil prices was a concern, it still remained manageable without upsetting the macro economic fundamentals of the economy.“The $125 billion import bill for the current financial year is high but it is still not the right estimate.Sanctions on Iran could result in some supply disruptions.If crude price rises by $1 per barrel, the net import bill will increase by Rs 6,158 crore.
Iran was India’s second biggest supplier of crude oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in the subsequent years. In fact, it touched $30 a barrel early in 2016. The lower import bill came on average crude price of around $46.PPAC estimate has also taken average price of the Indian basket crude oil for September 2018 at $77. Upstream contribution has been suspended since FY17 giving enough room to these companies to improve profits.A major disruption in Iran could send crude prices sharply higher just as the oil market is emerging from a prolonged period of oversupply.88 a barrel and average exchange rate for September at Rs 72. In FY17, the average crude price increased marginally to just over $47.In FY17, the import bill, however, rose marginally top over $70 billion.56 a barrel.While the recent spike in oil prices has alarmed the government, it is worth noting that fall in crude prices has resulted in big savings for the country in FY16 and FY17. The Indian basket of crude oil averaged $56. This could just be the beginning of further bad news for India. But sources now say murmurs have already started in the corridors of power that oil situation should be taken seriously as inaction could mean sharp cuts in populist government’s expenditure ahead of 2019 general elections.22 to a dollar to arrive at its import estimates
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