Crude Price Surge Could Significantly Raise India’s Oil Import Bill

• India’s oil import bill could increase by $56-64 billion annually if crude prices average $110-115 per barrel in FY27.
• Every $10 per barrel rise in crude prices increases India’s net oil imports by $14-16 billion.
• Higher crude prices could widen India’s current account deficit (CAD) by 30-40 basis points.
• A $10 rise in oil prices may increase WPI inflation by 80-100 basis points.
• Consumer price inflation (CPI) could rise by 40-60 basis points if fuel price increases fully pass through to retail prices.
• Higher fuel prices could increase transportation costs, raising prices of goods and services.
• This could pose risks to FY27 inflation projections of 2.7% (WPI) and 4.0% (CPI).
• India imported 243 million tonnes (MT) of crude oil in FY25 at a cost of $137 billion.
• In FY26 (till January 2026), India imported 206 MT of crude worth $100 billion.
• India imported 21 MT of crude in January 2026 at a cost of $9.5 billion.
• India imports over 85% of its crude oil requirements, making it vulnerable to global price shocks.
• If crude prices reach $120 per barrel, India’s oil trade deficit could rise to $220 billion.
• This could push the current account deficit beyond 3% of GDP and weaken the rupee.
• Oil prices surged nearly 20% recently due to geopolitical tensions in the Middle East.
• Concerns include supply disruptions and shipping risks through the Strait of Hormuz.
• Brent crude later eased to about $106 per barrel after talks of coordinated oil reserve releases.