By Bharat Gautam
(Reuters) – India’s crude oil imports last month dropped to their lowest since October, government data showed on Wednesday, as soaring global prices made it costlier to procure the fossil fuel.
February crude oil imports decreased by about 8.6% from the previous month and were 5.7% lower than pre-pandemic levels in the same month two years ago.
“The headline number being below Feb. 2020 levels suggests that India’s pandemic recovery still has quite some way to run,” said OANDA senior analyst Jeffrey Halley, attributing the drop in imports from January to the sharp increase in global oil prices.
Global crude prices have hit multi-year highs after Russia invaded Ukraine late last month, triggering a swathe of Western sanctions on Moscow and raising supply shortfall fears. [O/R]
“Going forward, the domestic fuel demand is expected to remain largely inelastic to the price swings from these events,” said Hetal Gandhi, director at CRISIL Research.
“With imports accounting for almost 85% of the total crude oil consumption, we expect revival in demand to support crude oil import volumes going forward.”
India’s fuel consumption in February rose 5.4% compared with the same month last year, the biggest year-on-year jump since August 2021. [O/INDIA2]
On a year-on-year basis, however, India’s crude imports rose about 15.4% to 17.59 million tonnes last month from the relatively low figure in February 2021 when demand was weak due to the coronavirus pandemic.
India is the world’s third-biggest oil importer and consumer, and covers over 80% of its crude oil needs with imports, relying heavily on the Middle East.
It is, however, considering taking up a Russian offer to buy its crude oil and other commodities at discounted prices, two Indian officials said this month.
Oil product imports dipped 1.2% to 3.32 million tonnes from a year earlier, while exports jumped 18.3%. India, Asia’s third-biggest economy, holds surplus refining capacity and exports refined fuels as well.
(Reporting by Bharat Govind Gautam in Bengaluru; Additional reporting by Brijesh Patel; Editing by Louise Heavens and Mark Potter)
