India’s crude oil import bill is expected to increase 23% in the current fiscal year, according the Petroleum Planning Analysis Cell (PPAC), data and policy analysis wing of the oil ministry.
“India’s crude oil import bill is expected to increase 23% from $70 billion in 2016-17 to $86 billion in 2017-18 considering Indian basket crude oil price of $55 a barrel and rupee-dollar exchange rate of 65 for the balance part of the financial year,” PPAC said in a report released on 24 July.
According to PPAC, if crude prices increase by one dollar a barrel, the net import bill increases by Rs 7969 crore ($1.23 billion) and if exchange rate of dollar increases by Re1 a dollar, net import bill increases by Rs6,743 crore ($1.03 billion).
“If we take $50 a barrel for oil and Rs 65 as exchange rate, compared to last year, then overall bill may not increase that much. However, indigenous production we don’t see any material increase because ONGC’s oil production is falling from the maturing fields. Cairn India’s production is also stagnating. In the next three years, new fields in KG basin and western offshore would kick in and uplift the country’s oil production,” K Ravichandran, senior vice president and group head, corporate sector ratings, ICRA Ltd .
The country’s indigenous crude oil production during June 2017 was marginally higher by 0.6% than that of June 2016, the PPAC report added.
The increase in crude oil output was from ONGC’s fields at 1.85 million tonnes, 3.13% higher than June 2016. Oil India too saw an increase in crude oil production in June clocking an increase of 5.03% at 0.2 million tonne.
In June 2017, the price of Brent crude averaged at $46.52 a barrel against $50.43 per barrel during May, 2017. The Indian basket crude averaged $ 46.56 per barrel in June as against $50.57 a barrel in May.
Import of liquified natural gas on the other hand has seen a drop over the last few months.
“LNG import for the month of June 2017 was 1,768 million metric standard cubic metres (mmscm) which was 9.70% lower than the corresponding month of the previous year. The cumulative import of 5886.64 mmscm for the current year till June 2016 was lower by 5.69% compared with the corresponding period of the previous year (6241.51 mmscm),” said the PPAC report.
This is also on account increase in production of domestic natural gas led by state-run ONGC, which produced 12.92% more gas.
“Gross production of natural gas for the month of June, 2017 was 2,755 million metric standard cubic metres per day (mmscmd) which was higher by 6.05 % compared with the corresponding month of the previous year. The cumulative gross production of natural gas of 8057.73 mmscmd for the current year till June, 2017 was higher by 4.04%,” the PPAC report said.