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Tue 23 Oct 2018 03:13 PM

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Double whammy for Indian crude oil market

India's domestic crude production in September falls by 4.19% even as import bill balloons

Double whammy for Indian crude oil market
The slide in crude production last month is 6.59 percent lower than the country’s target production set for the month.

It’s a double whammy for India on the crude oil front. Even as the country’s import bill has been ballooning on account of the spiralling global crude prices, India’s domestic crude production in September fell by 4.19 percent compared the same period a year ago.

The slide in crude production last month is 6.59 percent lower than the country’s target production set for the month.

According to the latest data released by India’s petroleum ministry, the country’s crude oil production fell for the sixth straight year in 2017-18 to 35.68 million tonne, pushing the country’s import dependence for crude further to 82.8 percent.

The steady decline in production is bound to upset India's plan to cut reliance on energy imports by 10 per cent through 2022.

Cumulative crude oil during April-September 2018 was 4.05 percent lower than target for the period, the ministry data showed.

Crude oil production has been on a decline primarily due to fall in output from nearly all offshore and onshore blocks.

The fall in the country’s crude oil production comes at a time India’s oil import bill is expected to increase by 20 percent to $105 billion in 2018-2019 on the back of recent rally in global oil prices.

India’s natural gas production also registered a marginal fall in September 2018, declining 1.43 percent lower than a year ago. The September 2018 natural gas production was 7.56 percent lower than the target for the month

During April-September 2018, the natural gas production was 0.96 percent higher at 16254.65 MMSCM compared to the corresponding period of last year. The gas production during this period, however, was 7.75 percent lower than target for the period.

On an annual basis, domestic natural gas production in 2017-2018 grew by 2.35 percent. Data shows the country’s natural gas production grew for the first time in a few years, as output from onshore blocks offset the decline from offshore blocks last fiscal.

Refinery production in terms of crude oil processed during September, 2018 was 2.18 percent higher than the target for the month and 1.28 percent higher compared with September, 2017.

Cumulative production during April-September, 2018 was 2.09 percent higher than the target for the period and 5.03 percent higher than the production during corresponding period of last year.

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