The continuing slide in global crude oil prices is likely to result in a savings of about $44 billion this financial year for India, according to an analysis by the union ministry of petroleum and natural gas.
In its November 2015 report, the ministry's petroleum planning and analysis cell (PPAC) has said that the country's crude oil imports are likely to be around $69 billion this fiscal, down 39% from $113 billion last financial year. The Modi government could not have asked for more.
Highlights of the report:
Falling crude oil prices
Brent crude averaged $44.29/bbl during November 2015 as against $48.56/bbl during October 2015,w hile the Indian basket crude averaged $42.50/bbl during November 2015 against $46.68/bbl during in October, the PPAC said.
India's decreasing oil import bill
Petroleum products as a percentage of India's total imports stood at 18.8%, down from 21.3% in November 2014. The value of petroleum product imports came down sharply to $2.3 billion in November 2015, from $4.1 billion in November 2014, though the quantity also registered a modest fall.
Petroleum products as a percentage of India's imports for the period April to November 2015 was 21.2% as against 30.7% in the corresponding period last year.
Domestic consumption grows
The country's petroleum consumption grew 6.4% in November 2015, as against 4.9% in November last year.
The cumulative petroleum consumption during the period April to November 2015 grew 9.5% to 10.2 metric million tonnes, when compared to the corresponding period last year.
Lower domestic production
The domestic crude oil production was 3.3% less in November 2015 at 103 tmt.
For the period April to November 2015, production grew at around 5% compared to the corresponding period last year.
Gross production of natural gas for the month of November, 2015 was 2,716 MMSCM which was lower by 3.9% compared with the corresponding month of the previous year (2,827 MMSCM).
LNG import during the month was 1,748 MMSCM, 18% higher than November 2014 at 1,481 MMSCM.
The cumulative LNG import at 13,889 MMSCM for the current year during April to November, 2015 was higher by 8.6% compared to 12,790 MMSCM during the corresponding period last year.
Oil import dependency up
India's import dependency has gone up from 78.1% during April to November 2014 to 79.9% in the same period this year.
In the absence of any planned shutdown, the capacity utilisation was 108.7% at Indian refineries.
Given these realities, will prime minister Narendra Modi and his finance minister Arun Jaitley take comfort in a rather comfortable fiscal position and reduce levies on petrol and diesel and thereby reduce petrol, diesel prices?