Crude import costs down 35%, creates room to cut fuel prices

livemint.com:

NEW DELHI : India’s oil import bill declined 35.3% during the first four months of FY24 due to easing crude oil prices over the past year. Refiners imported 79.4 million metric tonnes of crude oil for $41.6 billion during April-July, compared to 81.3 MMT for $64.3 billion in the same period of last fiscal, according to the Petroleum Planning & Analysis Cell (PPAC). This fall in import expense for the refineries and oil marketing companies (OMC) comes in the backdrop of around 30% fall in international crude oil prices.

The Brent crude in July averaged at $80.05 per barrel, compared to $112.70 a barrel in July last year. In June this year, Brent was at $74.70 per barrel. The Indian crude basket price in July averaged at $80.37 per barrel, down from $105.49 during July 2022.

Global crude prices have eased from the multi-year-highs reached in the first half of last year as supply concerns somewhat eased and demand weakened owing to a projected global slowdown. This fall in the import bill will likely see oil marketing companies, which operate most of the refineries in the country, increase their refining and marketing margins—and profits too —as retail fuel prices have remained unchanged since May last year.In the first quarter of FY24, OMCs, which are public sector companies, reported healthy profits. Among them, Indian Oil Corporation reported net profit of ₹14,735 crore for April-June compared to a net loss of ₹883 crore in the same period last year.