India - Russia: Crude Oil Fuelled India’s Russian Imports this Year

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India - Russia: Crude Oil Fuelled India’s Russian Imports this Year

One of the biggest economic fallouts of the Russia-Ukraine war has been a spike in global energy prices. With India importing more than 80% of its energy requirements, it has been affected by the crisis, with inflation staying above the 6% mark – it is the upper limit of RBI’s tolerance band – for the tenth consecutive month now. However, an analysis by Roshan Kishore & Rajeev Jayaswal (Hindustan Times) shows that things could have been worse for India had it not found an alternative and discounted source of crude petroleum from Russia after the war erupted. Their argument is below.

 

Imports from Russia at an all-time high

According to Centre for Monitoring Indian Economy (CMIE) data, India’s imports from Russia stood at $21.4 billion between April and September 2022. Despite being the import value for just half of the fiscal, this is an all-time high by quite a distance for India’s annual imports from Russia. The second highest number in the annual series is $9.9 billion in 2021-22.

 

Petroleum products account for major share in surge in imports from Russia

According to a preliminary official data, India’s merchandise imports from Russia was worth $3.84 billion in October 2022, more than 414% jump over $700 million worth of imports in the same month previous year. Imports mainly comprised energy (crude oil, petroleum products, coal, coke) and fertilisers.

CMIE data shows that the single biggest reason for surge in Russian imports is a jump in petroleum products. India imported petroleum products worth $15.6 billion from Russia between April and September 2022. This number was just $3.7 billion in fiscal year 2021-22.

 

Cost of Russian oil

The two researchers says since official data on the price of crude petroleum imported from Russia is not available, this is not an easy question to answer. However, an HT analysis of the numbers shows that average price of crude oil imported from Russia during April-September 2022 comes to $96.2 per barrel. This makes Russian imports the cheapest among the top five crude importing countries  to India during this period.

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