Is the Ukraine war likely to increase the oil import bill for India this year?

It is not just about the Ukraine war. India’s crude oil import bill look all set to cross $100 billion in FY22 by a margin due to the already high oil prices. In short, the oil import bill for FY22 is likely to be nearly twice that of FY21. In volume terms the increase may be just about 10% over last year, but the entire pressure has come from the spike in crude prices to close to $100/bbl in this year. That has been the biggest concern for the oil bill of India.

In the first 10 months ending January 2022, India has already spent over $94 billion on oil imports. If you extrapolate that for FY22, the total oil import bill is expected at a record level of $115 billion. However, let us not forget that these imports also generated exports worth $34 billion in value added products. On Thursday, 24th February, the price of Brent crude surged to a 8-year high of $105/bbl as the rising incidence of geopolitical risk is weighing.