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India spent almost double on crude oil imports, what was the reason?


New Delhi. India’s crude oil import bill almost doubled to $119 billion in the financial year 2021-22. The main reasons for this were the Ukraine-Russia war and the resurgence of fuel demand. According to the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry, India spent $119.2 billion on crude oil imports last fiscal, which is almost double the $62.2 billion spent in the previous fiscal.

India spent $13.7 billion on crude oil imports in March alone. During this time the price of oil had reached the highest level of 14 years. Whereas in the same month of the previous financial year, India had spent $ 8.4 billion on oil imports. Significantly, India is the third largest importer of crude oil.

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Oil reached $140 a barrel
Oil prices started rising in January and went from $100 per barrel to $140 per barrel in early March. After this, crude oil prices are currently close to $ 106 per barrel in the international market. According to PPAC, India imported 212.2 million tonnes of crude oil in 2021-22 from 196.5 million tonnes in the previous fiscal. However, this is still less than the 227 million tonnes imported in 2019-20 before the pandemic. In 2019-20, $101.4 billion was spent on imports. Significantly, more spending on crude oil imports will definitely have an impact on the country’s macroeconomics.

India’s refining capacity better
The country imports 85 percent of its crude oil requirement, which had come down slightly to 84.4 percent in 2020-21. At present, India imports 85.5 percent of its crude oil requirement. However, due to India’s refining capacity being in surplus, it exports many petroleum products (products made after refining crude oil such as petrol and diesel). However, the production of LPG in India is low, so it is imported from countries like Saudi Arabia. India imported 40.2 million tonnes of petroleum products for $24.2 billion in the fiscal year 2021-22, while exporting 61.8 million tonnes of petroleum products for $42.3 billion.

Tags: Crude oil



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