SME Times News Bureau | 31 Oct, 2020
India's oil import bill may fall further in the remaining period of the
current fiscal with Saudi Arabia looking at giving discount in crude it
sells to Asian Buyers.
Analysts tracking the development said
that the benchmark Dubai prices of oil have fallen and so have the gross
refining margins. If this holds, a 10-20 cents per barrel discount on
Saudi light crude would be available from December onwards.
The
development is positive for India that imports maximum oil from Saudi
Arabia after Iraq. Any discount on oil prices is expected to set the
ball rolling for cheaper oil imports from other oil producing countries
as well.
India imports 85 per cent of its domestic oil requirements. So any change in oil prices results in big savings for the country.
For
India, good news is also coming from global developments in the oil
market where prices are expected to remain soft in the absence of any
big pick up in demand due to the Covid-19 pandemic while the market
remains oversupplied with oil.
The benchmark Brent crude prices
witnessed a drop in the preceding week, falling from a level of $42 a
barrel to just about $38 a barrel now.
India imported 227 million
tonnes of crude for $101.4 billion in 2019-20. The import bill in the
April-September period of the current fiscal (FY21) has already fallen
by about 58 per cent to $22 billion as compared to an import bill of
$52.6 billion in the first half of FY20 due to lower oil prices.
