India paid 60% more for crude oil imports in the April-June quarter compared to the same period last year, as the surge in oil prices couldn’t offset slightly lower import volumes.
The value of India’s crude oil imports jumped in the first quarter of India’s 2026/2027 fiscal year ending March 31, 2027, due to the elevated international crude oil prices, provisional data from India’s petroleum ministry showed on Monday.
The soaring bill threatens to impact India’s government finances and fiscal balances and rekindle inflation fears in the world’s most populous country.
Generally, around 40% of India’s crude oil imports, 60% of its LNG imports, and 90% of its LPG imports come from the Middle East through the Strait of Hormuz.
The brief respite in prices and flows in the latter part of June was quickly followed in mid-July by another surge in prices and renewed concerns about supply availability as the situation in the Middle East precipitated a re-escalation of hostilities, which could crimp supply and raise India’s import bill again.
The oil price rally of the past week threatens India’s finances again as costs for importing crude oil are rising once again. India depends on imports for 88% of the crude oil it consumes daily, so the re-escalation poses an upward risk to inflation.
The Reserve Bank of India’s inflation target of 4% was exceeded in June, with consumer prices rising by 4.38% from a year earlier, slightly above the 4.3% analyst forecast.
However, the Reserve Bank of India, the central bank, is widely expected to keep the key interest rate at 5.25% in 2026, economists say, as the bank has yet to see considerable deterioration in inflation expectations and as it is projected to wait to see how long the renewed escalation will last.
By Tsvetana Paraskova for Oilprice.com
