The sharp financial restoration and rising demand publish the second wave of Covid coupled with a spike in international oil costs might pose a problem for the federal government in FY22 to take care of fiscal self-discipline amid good progress in tax income.
Country’s crude oil Import bill that fell drastically final yr in the absence of demand and comfortable oil costs, has risen by over 138 per cent in April-August of FY22 to $ 42 billion, up from near $ 18 billion the identical interval of final yr.
During the interval, crude has jumped by about 40 per cent from $60 a barrel to greater than $85 a barrel now. This worth stress has come when demand for petroleum merchandise is on an increase in the nation already reaching pre-Covid ranges and rising.
All this has meant that India is just not solely importing extra to fulfill further demand, however is doing it at premium costs ballooning its import bill.
In the April-August interval of the present yr, India imported 83.8 million tonnes of crude, up from 74 million tonnes of imports in the identical interval final yr. In the month of August, India imported 17.4 million tonnes of crude by paying $ 9.1 billion. This is greater than 16.9 million tonnes of imports at $ 5.5 billion final yr in August.
Interestingly, India’s oil Import bill stood at $ 62.7 billion in FY21. This quantity might be damaged in the primary six months of the present fiscal indicating a giant bounce in oil import bill is coming.
India imports near 85 per cent of its home oil wants and any spike in costs has a destabilising affect on its funds. Government is focusing on a fiscal deficit of 6.8 per cent of GDP for FY22. This could be a problem if oil costs hold shifting up and demand retains rising in the nation.
(Only the headline and film of this report might have been reworked by the Business Standard employees; the remaining of the content material is auto-generated from a syndicated feed.)