Crude Prices Hit India Hard, Import Bill Jumps 56%

India's oil import bill is under pressure due to a surge in crude oil prices. Brent crude jumped over 2% to $99 a barrel, while US West Texas Intermediate (WTI) gained nearly 3% to about $94.

The country imports more than 88% of its crude oil requirements, making it particularly vulnerable to rising prices. India's Crude Import Bill Jumps 56%, with the import bill surging over 56% to $63.4 billion during April-July compared to $40.5 billion a year earlier.

The Indian crude basket crossed $100 a barrel in September, averaging $100.75 against $90.19 in August and $82.04 in July. A prolonged rise in crude prices could increase India's dollar demand, pressure the rupee and trade balance, and push up inflation through higher transport and energy costs.

Oil companies like Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation face margin pressure as higher crude prices squeeze marketing margins. Retail petrol and diesel prices have remained unchanged for over three months after being raised by a cumulative Rs 7.35 and Rs 7.53 per litre in May.

ICRA's Prashant Vasisht noted that rising crude prices could turn auto-fuel marketing margins negative and increase domestic LPG under-recoveries from around Rs 200 per cylinder.