Russian crude imports cut India’s oil bill by $8bn in FY24

India’s decision to prioritize cheaper oil sources, despite Western pressure for a Russian oil embargo post the Russia-Ukraine conflict, appears to have yielded significant benefits. According to the latest ICRA report, the country saved approximately $7.9 billion on its oil import bill in the first 11 months of the fiscal year 2023-24, and $5.1 billion in FY2023.

The value of India’s imports of petroleum crude and products, however, declined by 15.2% YoY during April-February FY2024, even as volumes rose slightly in this period, shows the data.

This was supported by the fall in average global crude oil prices as well as savings from stepped-up purchases of discounted Russian crude, says ICRA.

According to data from the Ministry of Commerce and Industry, in terms of volume, the proportion of crude petroleum imported from Russia surged to 36% during the first 11 months of FY2024, up from a mere 2% in FY2022, coinciding with the onset of the war. Meanwhile, India’s crude imports from West Asian nations like Saudi Arabia, the UAE, and Kuwait, declined to 23% from 34% in the same timeframe.

As per ICRA, the savings from buying Russian crude likely decreased to $2 billion from $5.8 billion between September and February of FY2024, compared to the period from April to August of the same fiscal year.

India’s reliance on oil imports is anticipated to stay substantial. There are concerns that if the discounts on Russian crude purchases continue at current low levels, India’s net oil import bill could rise to $101-104 billion in FY2025 from $96.1 billion in FY2024. This projection assumes an average crude oil price of $85 per barrel for the fiscal year.

Source:

https://timesofindia.indiatimes.com/india/russian-crude-imports-cut-indias-oil-bill-by-8bn-in-fy24/articleshow/109738272.cms

https://www.fortuneindia.com/macro/india-saved-8-bn-in-oil-import-thanks-to-discounted-russian-crude/116644