The sharply falling value of the Indian rupee vis-a-vis the US dollar will push up the country's crude oil import bill by about $16 billion in the 2018-19 financial year, officials said yesterday.
India, which imports over 80 percent of its oil needs, spent $87.7 billion on importing 220.43 million tonnes of crude oil in 2017-18. For 2018-19, the imports are projected at almost 227 million tonnes.
“At the beginning of the financial year, we estimated that the crude oil import bill will be around $108 billion at an average crude oil price of $65 per barrel and exchange rate of Rs 65 per dollar,” an official said.
But the exchange rate has been at an average of Rs 67.6 for one dollar till August 14. If the rupee was to stay around 70 per dollar for the rest of the ongoing fiscal year, the oil import bill will be $114 billion, he said.
The rupee has been among the worst performing currencies in Asia, witnessing a 8.6 percent slump this year.
Fanned by a higher oil import bill, India's trade deficit widened to $18 billion in July, the highest in more than five years.
Rupee depreciation will result in higher earnings for exporters as well as domestic oil producers like Oil and Natural Gas Corp.