In a sign that slowdown in the Indian economy may be long drawn, a government report has projected a modest 3.5 per cent growth in oil imports this year. Considering that India imports more than 80 per cent of its oil requirements, slow growth in imports signals tepid demand and consumption.
According to Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC), country’s oil imports is projected to rise to 233 million tonnes (mt) in FY 20 against 227 mt in FY19, a growth of mere 6 mt.
While slower growth in oil imports is good news for exchequer in terms of keeping the high oil bill under check, it also signals that less crude will be processed by Indian refineries as there would be less consumption of products such as petrol, diesel and ATF, indicating pressure points in the economy.
After showing improvement in early part of 2018, Indian economy has again showed signs of a slowdown in the third quarter of FY19 registering a GDP growth of 6.6 per cent. This has led to overall growth projection for FY19 being downgraded to 7 per cent from earlier 7.2 per cent. International agencies have also brought down growth projections for FY20 to 7.3 per cent level. Read more
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