India’s oil trade deficit increases
Rating agency Crisil on Thursday said India’s oil trade deficit has widened in the last two fiscal years despite softening crude prices, underscoring a significant gap between global and domestic oil consumption patterns.
Crisil said that despite the decline in crude oil prices, India’s oil trade deficit has widened as the country’s oil import growth has outpaced petroleum exports, barring an increase from the current fiscal year 2023-24 (FY24). “Traditionally, India’s oil trade deficit has been in sync with global crude oil prices. However, this correlation has broken down in the last two fiscal years,” it said.
India’s oil imports have overtaken its petroleum exports due to the country’s growing oil demand, which is in contrast to global consumption patterns. According to the International Energy Agency (IEA) outlook, global oil demand will stagnate by 2029 and shrink by 2030, mainly due to low levels of economic growth and accelerating substitution away from oil in the transportation and power generation sectors.
In contrast, India’s oil demand is projected to grow by 1 million barrels per day between 2024 and 2030, making it the largest contributor to global oil demand growth due to urbanization, industrial expansion, and transportation needs.
Crisil said if this trend continues, the oil trade deficit could put more pressure on the overall trade deficit.
Meanwhile, amid disruption in energy supply due to the West Asia conflict, the government assured 100 per cent fuel availability for domestic consumers of Liquefied Petroleum Gas (LPG). On April 29, state-run oil marketing companies (OMCs) delivered over 47 lakh domestic LPG cylinders against bookings of around 43 lakh LPG cylinders, Sujata Sharma, joint secretary, Ministry of Petroleum and Natural Gas (MoPNG), said at an inter-ministerial briefing.
He said that till April 29, more than 43,050 piped natural gas (PNG) consumers have surrendered their LPG connections. Sharma also said that the government is assessing consumers with both LPG and PNG connections.
