India paid 15.4 billion dollars to import crude oil in September, up by 46 percent from the year ago import bill of 10.5 billion dollars, as international oil prices and the Indian import crude basket soared amid renewed tensions in the Middle East, OilPrice reported on Monday, citing data from the Oil Ministry’s Petroleum Planning and Analysis Cell as reported by the Times of India. India, the world’s third largest crude oil importer, saw crude import volumes rise by 7 percent in September from a year earlier, while the price paid rose by 46 percent.
The Indian basket of crude, the reference price for India’s imports, averaged 116.09 dollars per barrel in September on government data, higher than the 114.48 dollars per barrel recorded in April at the peak blockage of the Strait of Hormuz. The basket is an average of a sweet grade benchmark, dated Brent, and the sour grade Oman and Dubai average imported by Indian refineries during each month.
The half year picture is the same shape. In the period April to September, India’s crude oil import bill jumped by 46.3 percent to 90.6 billion dollars, up from 61.9 billion dollars in the same period last year, entirely due to the surge in oil prices, as import volumes have remained flat or lower than year ago levels in recent months. Freight is compounding the barrel price: rates on the key route from Ras Tanura on Saudi Arabia’s Persian Gulf coast to India have soared three to four times since February 28, when the war began and Iran closed off the Strait of Hormuz.
October is not yet offering relief. India’s import costs for October could exceed the September 15.4 billion dollar cost, as the Indian crude import price has averaged 121.25 dollars a barrel so far this month, according to government data cited in the report. For an economy that also halted sugar based ethanol procurement last week to cap food prices, the crude bill is the energy half of the same import inflation problem.