Crude import bill up 2.9% in April-February
India’s crude oil import bill rose 2.9% to $124.7 billion in the first 11 months of FY25, with import volumes up 3% to 219.9 million tonnes. US sanctions on Russia are driving India to diversify its oil sources, increasing US imports. Meanwhile, domestic production declined 4% in February, highlighting supply challenges.
India’s crude import bill rose by 2.9% during the first eleven months of FY25, reaching $124.7 billion compared to $121.2 billion in the same period of FY24, according to data from the Petroleum Planning and Analysis Cell.
The country imported 219.9 million tonnes of crude oil between April and February, marking a 3% increase from 213.4 million tonnes in the corresponding period last year.
In February alone, the crude oil import bill increased by nearly 3% to $10.6 billion, while import volumes increased by 5% to 19.1 million tonnes compared to February 2024.
India’s reliance on crude oil imports increased to 88.2% during April-February of the current fiscal, up from 87.7% in the same period of FY24, amid rising demand.
At the start of FY25, Icra had projected India’s net crude oil import bill to reach $101-104 billion, up from $96.1 billion in FY24, due to reduced discounts on Russian crude and increasing import dependence.
The latest US sanctions on Russia have also created uncertainty in India’s crude oil supply, potentially leading to higher costs for Indian refiners as they diversify their sourcing—often at a premium to the landed price of Russian crude.
With these challenges, several Indian oil and gas majors have been eyeing to secure more crude oil and LNG from the US. The US is among the top five suppliers of crude oil to the country. Analysts and industry players expect the imports of US crude oil and gas to increase going ahead as the two countries seek to strengthen energy trade and ties post the latest meeting of Prime Minister Narendra Modi with the US President Donald Trump.
According to analysts, increased availability of US crude oil could help keep other global suppliers, including Russia, price-competitive in the Indian market. Moreover, with the Indian government aiming to raise natural gas’s share in the energy mix from 6% to 15% by 2030, greater US gas imports are seen as a positive development.
While the demand for crude oil and its products continues to rise, domestic production of oil remains lower with the country’s upstream companies producing 26.2 million tonnes of oil during Apr-Feb, down from 26.9 million tonnes in the same period of FY24.
The declining trend in production can be attributed to maturing of the existing oil fields amid lack of new areas of production, as per analysts. In February, production declined by 4% to 2.2 million tonnes from last year.
Now, with the recent amendments in the Oilfields (Regulation and Development) Act, 1948, the government expects increased participation from the domestic and international players. The amendment broadens the definition of mineral oils which includes any naturally occurring hydrocarbon, coal bed methane, oil shale, shale gas, etc.
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Source : Financial Express
