(HT)
India’s average crude oil import price fell to a 42-month low of $71.20 a barrel in the first fortnight of March because of the Chinese slowdown, international efforts for a ceasefire in the ongoing Russia-Ukraine conflict and US president Donald Trump’s resolve to boost American oil output, though it’s not a given that domestic retail prices will come down.
India, which imports over 88% of the crude oil it processes, had last witnessed an average monthly oil import price of the Indian basket below $70 a barrel in August 2021. Since then, the monthly average saw an upward movement due to various geopolitical and economic reasons aggravated by the Russia-Ukraine war in early 2022, followed by the Hamas attack on Israel in October 2023.
India’s current annual average crude import price is also the lowest since 2020-21. The average price in the current financial year up to March 15, 2025 is $78.49 per barrel, according to the data. The annual average of the Indian basket was $44.82 a barrel in 2020-21, which rose to $79.18 a barrel in 2021-22, peaked at $93.15 in 2022-23, and remained high at $82.58 a barrel in 2023-24 before falling to $78.49 in FY25.
According to the government’s data, the average price of the Indian basket started rising from $69.80 per barrel in August 2021, surged to $112.87 a barrel in March 2022, and peaked at $116.01 in June 2022. After falling marginally to $105.49 in July 2022, the monthly average crude price of the Indian basket remained below $100 a barrel subsequently.
Petroleum sector experts said India’s retail prices of petrol and diesel are not aligned with the international market, and private refiners are having a margin of about ₹10-12 per litre on the two automobile fuels. In all likelihood, global oil prices are expected to remain subdued in the coming months, they said, requesting anonymity.
The Reserve Bank of India’s monetary policy committee had a similar observation. “Globally commodity prices are softening due to several factors. The crude oil prices are likely to head downwards due to the Chinese slowdown, the recently announced ceasefire in the Middle East with the prospects of the Ukraine conflict also brightening with the Trump 2.0 Presidency which is also likely to enhance the US output of oil and growing dependence on renewables,” the minutes of the committee meeting published on February 21 said.
Recently, Trump requested Opec to lower oil prices in order boost economic growth, S.C. Sharma, an energy expert and former officer on special duty at the erstwhile Planning Commission said. “If we have a look at the Trump 1.0 tenure, the oil prices (Indian basket) between 2017-2021 averages at $ 57.75 per barrel. Looking at various forecasts, it is expected that the oil prices may range between $ 65 and $73 per barrel during 2025-26 and beyond,” he said.
