India’s oil imports are estimated to fall by 8.9 per cent during the current fiscal year, which may save the government’s expenditure by a significant margin. Given the lack of crude oil demand by Indian refiners, it is estimated that daily imports of crude oil will fall to 4.14 million barrels in FY21 from 4.5 million barrels per day in FY20, said a report by Care Ratings. More than 80 per cent of India’s oil consumption is met through imports and thus oil imports hold a large share in the country’s overall imports, hence, a cut in imports will help bringing down the import bill substantially.
Also, cheap oil prices in the international market are further expected add to the benefits. It is expected that a dollar increase or decrease in prices of crude oil would affect the import bill by nearly USD 1.5 billion per annum. On the back of an economic slowdown, India’s crude oil import bill had come down by 8.7 per cent during the last fiscal to USD 102.2 billion. Cutting down excess dependence on international crude oil prices, the country has also filled its strategic reserves to full capacity. The government claimed that it has saved Rs 5,000 crore in foreign exchange while strengthening its energy security by filling the reserves.