The continued slide in crude oil prices globally would enable India to cut its oil import bill by $48.5 billion to $64.22 billion in the current financial year, down 43% from $112.75 billion in the previous fiscal.
In its December report released on 27 January, the petroleum planning and analysis cell (PPAC) said that India's crude oil basket price averaged around $35.68 per barrel during December 2015, as against $42.50 per barrel in November 2015.
Extrapolating the nine-month oil import data and the fall in crude oil prices, the PPAC said that the import bill is likely to be $64 billion in FY2016, down from $112.75 billion in FY2015, presuming a price of $40 per barrel and an exchange rate of Rs 65 per US dollar for the remaining three months this fiscal.
India imported 149.4 million metric tonnes (mmt) of crude oil valued at $52.8 billion during the April-December 2015 period, as against 142.2 mmt for $95.8 billion during the corresponding period last fiscal.
The import dependency was up from 78.2% to 80.2%, indicating that falling prices have led to an increase in consumption, notwithstanding the increase in excise duty on petrol and diesel in November and December last year.
Highlights of the December report:
Domestic consumption rises
The consumption of decontrolled petroleum products was 11,328 thousand metric tonnes (tmt) in December 2015, up 9.3% from 10,367 tmt during December 2014.
Consumption of petrol grew by 11.8% in December 2015 as compared to December 2014. The cumulative increase for the period April to December 2015 was 14.2%. The report attributed it to the growing preference for petrol vehicles.
Diesel consumption increased at a lower pace at 5.3% in December 2015, while the cumulative nine-month consumption grew at 6.2% on a year-on-year basis.
The consumption of jet fuel, or aviation turbine fuel (ATF), rose 11.7% in December 2015, while the cumulative consumption during April to December 2015 was up 7.8%.
Total Liquified petroleum gas (LPG) consumption increased 6.2% in December 2015, marking a rise for the 28th month in a row. The cumulative growth was 7.5% during the nine-month period. In the domestic LPG segment, the rate of growth was lower at 3.9% in December 2015, though the cumulative growth was 5.7%.
The indigenous crude oil production during December 2015 was 3.95% lower than in December 2014. The nine-month production during fiscal 2016 was 0.82% less than the April to December 2014 period.
On a cumulative basis, petroleum production between April and December 2015 was up 2.9% as compared to the corresponding period last fiscal.
Gross production of natural gas during December, 2015 was 2,737 MMSCM, 6.11% lower than 2,915 MMSCM in December 2014.
Crude oil producers in India include ONGC, Oil India Limited and other private companies, and refined in refineries owned by IOC, BPCL, Reliance, Essar, CPCL and MRPL.