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India's oil import bill to jump by USD 26 billion on rupee woes - Government

Gasoil News - Published on Mon, 20 Aug 2018

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PTI quoted government officials as saying that India's crude oil import bill is likely to jump by about USD 26 billion in 2018-19 as rupee dropping to a record low has made buying of oil from overseas costlier. Besides, the rupee hitting a record low of 70.32 to a US dollar in the opening deal today will also lead to a hike in the retail selling price of petrol, diesel and cooking gas (LPG). India, which imports over 80 per cent of its oil needs, spent INR 5.65 lakh crore on importing 220.43 million tonne (MT) of crude oil in 2017-18. For 2018-19, the imports are pegged at almost 227 MT.

An official said that "We at the beginning of the financial year estimated that crude oil import bill will be around INR 7.02 lakh crore at an average crude oil price of USD 65 per barrel and exchange rate of INR 65 per dollar."

Official said that but the exchange rate has been at an average of INR 67.6 till August 14. If the rupee is to stay around 70 per dollar for the rest of the ongoing fiscal, the oil import bill will be USD 114 billion. The rupee has been among the worst performing currencies in Asia, witnessing 8.6 per cent slump this year.

Fanned by a higher oil import bill, India's trade deficit, or the gap between exports and imports, in July widened to USD 18 billion, the most in more than five years.

Trade shortfall puts pressure on the current account deficit (CAD), a key vulnerability for the economy.

Rupee depreciation will result in higher earnings for exporters as well as domestic oil producers like Oil and Natural Gas Corp (ONGC) who bill refiners in US dollar terms.

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Posted By : Nanda Koijam on Mon, 20 Aug 2018
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