• June 19, 2024

India’s Dependence On Imported Crude Oil Hits Record High Of 87.3% In 2022–2023

According to data from the Petroleum Planning & Analysis Cell (PPAC) of the oil ministry, India’s dependence on imported crude oil will reach a record high of 87.3% in 2022–2023 for domestic consumption as a result of the country’s rising demand for fuel and petroleum products and a decline in domestic crude oil production. 

This is an increase from 84.4% in 2020–21 and 85.5% last year. with a little more than 250 million tonnes of yearly refining capacity and a net export of petroleum products, India ranks third among the world’s consumers and is one of its biggest importers of crude oil.

A record 222.3 million tonnes of domestic petroleum products were consumed in 2022–2023, an increase of about 10% year over year mostly due to demand for petrol and diesel, among other transportation fuels. 

While production of domestic crude oil decreased by 1.7% annually to 29.2 million tonnes, imports of crude oil rose by 9.4% annually to 232.4 million tonnes. From $120.7 billion in 2021–22 to $158.3 billion the next fiscal year, imports of crude oil surged.

India generated 28.2 million tonnes of petroleum products from its crude oil in 2022–2023, down from 14.5% the year before and a 12.7% increase in crude oil self-sufficiency. With a domestic use of 201.7 million tonnes, 29.3 million tonnes of petroleum products made from domestic crude oil were used in 2021–2022.

The Indian government has been working to lessen its using imported crude oil frequently, but a major barrier has been the nation’s low domestic oil production in the face of rising demand for petroleum products. 

Reducing the nation’s dependency on pricey oil imports is the main objective of the government’s push to promote biofuels, electric cars, and other alternative fuels for use in industry and transportation. 

Due to its heavy reliance on imported crude oil, India’s economy is particularly susceptible to fluctuations in the price of petroleum, which affect the country’s international trade deficit, foreign currency holdings, the value of the rupee, and inflation. 

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High-sulfur or sour crudes now account for 77.5% of India’s oil imports, up from 76.6% the year before. For the fiscal year, 197.9 million tonnes more than the year before, Indian refiners purchased sour crudes.

From 56.7 million tonnes in 2021–2022 to 57.3 million tonnes in 2022–2023, the volume of low-sulfur or sweet crude imports grew marginally. Because sour crudes contain a lot of sulfur, refining them is more difficult and expensive than processing sweeter grades of oil. 

Sour crudes, on the other hand, are typically less expensive than sweet crudes and may be processed in more recent refineries. 75.62 to 24.38 is the ratio of sour to sweet grades. in the Indian crude basket, which is a derived basket of the two grades based on how the crude is processed in Indian refineries.

Senior industry officials claim that one of the reasons for India’s rapidly rising import of cheap Russian oil is the country’s increased use of sour crudes. This is due to India having been importing quality medium-sour Urals oil, which is the most common Russian oil grade, for more than a year.