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    India's oil import bill witness steep rise

    Synopsis

    Oil was trading above $88 per barrel on Monday, 36% up since the beginning of the current financial year, as supply has lagged a sharp recovery in global demand. Geopolitical tensions in the Mideast and Eastern Europe have also aided price rise in recent days.

    oilAgencies
    The average price of the Indian basket of crude oil is about $73 per barrel this fiscal year as against $45 in 2020-21 and $60.5 in 2019-20.
    Surging prices have doubled India's oil import bill this financial year while gas import costs have risen 61%.

    India paid $82.4 billion for the crude oil it imported in the nine months through December 2021, a 108% jump over $39.6 billion paid over the same period in 2020, according to the Oil Ministry data. The jump was primarily due to spiraling prices as the volume of imported oil increased only 9% in the same period.

    The bill for nine months has already eclipsed the entire year’s import spending of $62.2 billion in 2020-21. At the current pace, this year’s import spending would easily surpass $101.4 billion of 2019-20 and may match $112 billion of 2018-19.

    Oil was trading above $88 per barrel on Monday, 36% up since the beginning of the current financial year, as supply has lagged a sharp recovery in global demand. Geopolitical tensions in the Mideast and Eastern Europe have also aided price rise in recent days.

    The average price of the Indian basket of crude oil is about $73 per barrel this fiscal year as against $45 in 2020-21 and $60.5 in 2019-20.

    The natural gas import bill too has expanded 61% to $8.7 billion even though volumes fell 3% in the April-December period. India paid $7.9 billion in 2020-21 and $9.5 billion in 2019-20 for the import of gas.

    Natural gas prices have skyrocketed in the global market as supply failed to match demand. Record-high rates in the spot market have curbed Indian consumption of liquefied natural gas (LNG). Asia-delivered LNG has traded above $30 per mmBtu for months in the spot market. Even LNG volumes obtained under long-term contracts have become expensive as these are mostly linked to oil prices that have sharply risen this year.


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