India pays nearly $29 billion more for almost same crude volumes in H1

In effect, India imported almost the same amount of crude but paid substantially more for every barrel. In rupee terms, the country spent Rs 8.53 lakh crore on crude imports in just six months. The first-half bill is already about 72% of the $125.8-billion crude import bill for the entire FY26, highlighting the scale of the price shock. The higher import bill came despite softer domestic fuel demand.

Consumption of petroleum products during April-September fell 3.3% year-on-year to 114.8 million tonne, indicating that prices, rather than a sharp increase in underlying demand, were the primary driver of the surge in import costs. The biggest blow came in April-June, when the West Asia conflict pushed international crude prices sharply higher. India’s Q1 crude import bill jumped 61% year-on-year to $49.8 billion even as import volumes declined to 59.8 million tonnes, according to PPAC data.

The pressure eased during July-September. Based on the first-half and Q1 numbers, India spent about $40.8 billion on crude in Q2, around $9 billion less than in the previous quarter, even as imports increased to roughly 62.9 million tonne. This meant India imported more crude in Q2 than in Q1 but paid less for it as the extreme price shock seen earlier in the fiscal moderated. The relief, however, began to reverse again in September.

India imported 21.7 million tonne of crude during the month, up 6.6% year-on-year, but the import bill surged to $15.4 billion from $10.5 billion a year earlier. The rise was driven by a renewed jump in global oil prices. The Indian crude basket averaged $116.09 a barrel in September, against $69.61 a barrel a year earlier. Brent averaged $116.77 a barrel, compared with $68.02 in September 2025. 4 tn in future revenue: Inside AI financing loop flagged by IMF India remains particularly exposed to such price swings as it imports close to nine out of every 10 barrels of crude it consumes.

Crude import dependence stood at 88.1% during April-September. At the same time, domestic crude production declined to 13.7 million tonne from 14.2 million tonne in the corresponding period last year. The higher crude cost is also spilling over into the broader external account. India’s net oil and gas import bill rose to $81.1 billion during April-September from $60.2 billion a year earlier. Petroleum imports accounted for 22.7% of the country’s merchandise imports by value, compared with 19.5% in the year-ago period.

The pressure had already begun to show in the broader economy. India’s current account deficit widened to $4.2 billion, or 0.5% of GDP, in Q1 FY27 from $3.4 billion a year earlier, as higher energy costs added to the import burden. “The key risk for India is therefore straightforward: the country does not need to import substantially more oil for its crude bill to rise sharply. With domestic production declining and import dependence stuck above 88%, prolonged high international crude prices can quickly translate into a larger trade bill, pressure on the current account and higher costs across the economy,” said an analyst tracking the sector.