Amidst the volatile dynamics of world energy markets, India, one of the world’s largest consumers of crude oil, has reported a noticeable decrease in its oil import bill, highlighting the impact of fluctuating global oil rates. Official data for the fiscal year concluding on March 31 reveals an intriguing pattern: a notable 16% drop in the financial burden of the country’s oil imports, contrasted by an increased reliance on foreign supplies.
For the fiscal year 2023-24, extending from April 2023 to March 2024, India’s total crude oil imports were pegged at 232.5 million tonnes, a tally that mirrors the figures championed in the previous financial year. Nevertheless, the country’s expenditure on these imports manifested a significant decline; India’s outlay fell to $132.4 billion during FY24, a stark contrast to the $157.5 billion tab accumulated in the year 2022-23. This dip in expenditure is principally attributed to the deflating international oil rates, as reflected in the data disseminated by the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC).
The nuances of India’s energy equation become more complex with the disclosure that import dependence–the measure of the nation’s reliance on outside sources for crude oil–escalated to 87.7% in the said fiscal year, marking an uptick from the 87.4% recorded earlier. The incremental yet consistent rise signals India’s growing thirst for crude, despite domestic production steadfastly hovering around 29.4 million tonnes with negligible annual variation.
Beyond crude, India’s financial commitments to energy imports also comprise hefty investments in petroleum products like LPG. To decode the numbers, India handed over $23.4 billion for the intake of 48.1 million tonnes of such products. In a reciprocating trade movement, the country saw the export of 62.2 million tonnes of petroleum products, infusing $47.4 billion into the economy.
Natural gas, another critical component of India’s energetic portfolio, is also sourced extensively from international sellers in the form of liquefied natural gas (LNG). The fiscal narrative recounts a post-price-shock scenario, where the aftermath of geopolitical tremors such as Russia’s military actions in Ukraine, had led to an unprecedented spike in energy prices the year preceding. For the year ended March 31, 2024, India’s LNG imports were billed at $13.3 billion for 30.91 billion cubic meters of gas. This portrayed a fiscal relief when juxtaposed with the previous year’s expenditure of $17.1 billion on 26.3 billion cubic meters.
The net oil and gas import bill, an amalgamation of the costs for crude oil, petroleum products, and LNG imports minus the revenue from exports, was calculated at $121.6 billion for the fiscal year 2023-24. This figure represented a palpable decrease from the prior year’s $144.2 billion.
In the grand schema of India’s gross imports (valued in monetary terms), petroleum imports comprised 25.1%, marking a decrease from the previous 28.2%. Symmetrically, petroleum exports constituted 12% of the nation’s total exports, diminishing from 14% during the last year.
Against the backdrop of this economic landscape, India’s fuel demand registered a robust 4.6% growth, reaching a peak consumption of 233.3 million tonnes by the end of March 2023. This surge in consumption notably exceeds the figures from the preceding two fiscals. Despite the scarcity in native crude oil production, India is poised with excess refining capacities that have the potential to churn out considerable volumes of exportable petroleum products like diesel. It is notable that against the consumption of 233.3 million tonnes, the production of petroleum products stood tall at 276.1 million tonnes for FY 2023-24, as detailed by the PPAC data.
Thus, the financial year 2023-24 sketches a picture of India’s energy scenario with stark contrasts. On the one hand, the reduced global oil prices have eased the national import bill, yet on the other, the trajectory of import dependency is ascending, pointing to larger global market engagements and the intricate balancing act that defines India’s energy security and economic strategy.
