That could lead to an oil import bill of between $130 billion and $155 billion for 2018-19.
A day after crude oil prices hit $80 a barrel, the government said it expected an increase of $25-50 billion in the import bill for 2018-19. That could lead to an oil import bill of $130-155 billion.
India’s crude oil import bill for 2018-19 was estimated at $105 billion, according to the Ministry of Petroleum’s Petroleum Planning and Analysis Cell.
“Under different scenarios, we see the impact of higher crude prices ranging from $25 billion to a maximum of $50 billion on the oil import bill. The increase in the oil import bill will also affect the current account deficit,” Economic Affairs Secretary S C Garg said in a conference on Friday.
Garg, said, "We will continue to ensure that there is no adverse impact on fiscal deficit." Asked if the government would cut the excise duty on petrol and diesel, he said: "Just watch. There has been adjustment to the prices past few days. What does that indicate?" Excise duties account for a fourth of retail selling price of the fuels.
The gross oil import bill during 2017-18 stood at $109.11 billion, more than 25 per cent higher than the year before. India’s earnings from processed crude exports, one of the largest export segments, trailed expectations in the same year. Garg said net oil import bills in 2017-18 were around $70 billion.
Oil prices hit $80 a barrel on Thursday for the first time since November 2014 on concerns that exports from Iran could fall because of renewed US sanctions, reducing supply in an already tightening market.
On Friday evening, Brent crude futures rose by 22 cents to $79.52 a barrel. US West Texas Intermediate crude futures were unchanged at $71.49 a barrel, and set for a third straight week of increase.
The price of the Indian crude oil basket stood at $77.73 a barrel. The 2018-19 Budget had assumed an average crude oil price of $65 per barrel for the year.
For 2018-19, the Centre has assumed an oil price of $65 a barrel. At that price, the petroleum subsidy has been budgeted at Rs 249 billion. The fiscal deficit for the year has been budgeted at Rs 6.24 trillion, or 3.3 per cent of gross domestic product.