NEW DELHI: India's crude oil import bill surged 47 per cent year-on-year to $15.4 billion in September, amid resurging conflict in West Asia that has driven international crude prices sharply higher, according to provisional government data.
Data from the Petroleum Planning and Analysis Cell (PPAC), the data and analysis body under the Ministry of Petroleum and Natural Gas, showed that crude oil imports rose 7 per cent year-on-year to 21.7 million metric tonnes (MMT) in September. The increase in volumes, combined with sharply elevated prices, pushed the import bill up by nearly half compared with the same month last year.
The increase in import costs widened India's net oil and gas import bill — calculated as imports of crude oil, petroleum products and gas minus exports of petroleum products — by 39.6 per cent to $13.4 billion during the month, a significant drag on the country's external balance.
Petroleum product exports declined 24.2 per cent to 4.7 MMT in September, although the revenue accrued from those exports accelerated by about 20 per cent to $4.8 billion, reflecting the same elevated price environment that is inflating the import bill.
In the gas segment, shipments of liquefied natural gas (LNG) were about 8.5 per cent lower at 2,957 million standard cubic metres (MMSCM) in September, down from 3,233 MMSCM in the corresponding month last year. However, the LNG import bill stayed almost flat at $1.2 billion, indicating that higher gas prices offset the decline in volumes.
The September figures extend a trend that has been building through the financial year. India's crude oil import bill rose 48.4 per cent year-on-year to $74.8 billion during April-August, the first five months of FY27, according to PPAC data. The country spent $24.4 billion more on crude during the five-month period than in the corresponding period a year earlier.
Strikingly, the volume of crude imports fell marginally by 0.4 per cent to 100.7 MMT from 101.1 MMT a year earlier — meaning the surge in spending was driven almost entirely by higher prices, not by India buying more oil. In rupee terms, the import expenditure rose 62 per cent to a little over Rs 7 trillion.
The average price of the Indian crude basket, the benchmark that determines what Indian refiners pay, averaged $90.19 per barrel in August, 30.5 per cent higher than $69.11 per barrel in August 2025 and 9.9 per cent above the July average of $82.04. The situation worsened through September. The Indian crude basket climbed to $123.86 per barrel on September 18, up from $99.35 per barrel on September 2.
Brent crude, the international benchmark, averaged $90.84 per barrel in August compared with $68.21 a year earlier, and remained above $100 per barrel for more than 18 days through September, trading at around $102 on September 21.
The rise in crude prices has been fuelled by concerns over supply disruptions amid the ongoing West Asia conflict. Attacks on Saudi Arabia's East-West pipeline have disrupted shipments through the Red Sea, while tensions around the Strait of Hormuz have raised concerns over the availability and movement of Gulf crude.
The International Energy Agency (IEA) said on September 18 that renewed hostilities had caused further disruptions to regional oil exports and warned that prolonged supply constraints could put additional pressure on prices.
For India, which imports the bulk of its crude oil requirement, the rising bill has major macroeconomic implications. The oil import bill is one of the largest drivers of India's trade deficit and a key influence on the value of the rupee. Analysts estimate that every $1-per-barrel increase in global crude prices can add roughly $2 billion to the country's annual import bill, a scale that makes the current price surge of $30 or more per barrel an enormous burden.
Higher fuel and freight costs also feed into inflation. Wholesale inflation was already at 9.9 per cent in August, and rising input costs are affecting the expenses of manufacturing, transport, and consumer-focused companies. While some companies have managed to pass these higher input costs to consumers, that ability depends on sustained market demand.
A short spike in oil prices is manageable for many businesses, but a prolonged period of expensive oil could pressure profit margins and dampen consumer spending.
The pressure on India's energy bill comes at a delicate moment for the country's trade diplomacy. US President Donald Trump on Friday waived the application of sanctions and tariffs under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, a day before measures that could have imposed tariffs of up to 100 per cent on goods from the top five buyers of Russian crude — including India — were set to take effect.
India, which expanded its purchases of discounted Russian crude after the Ukraine war began in 2022 to secure its energy needs, had warned that its energy trade was firmly tied to the energy security of its 1.4 billion people. The waiver provides immediate relief, but the underlying vulnerability remains.
Looking ahead, the trajectory of India's import bill will depend on whether the West Asia conflict de-escalates and supply routes stabilise. Forecasts from organisations like Crisil suggest that Brent crude could range between $88 and $93 per barrel for the current financial year, while S&P Global Energy expects prices to fluctuate between $80 and $100 through 2027. Those ranges, if they hold, would keep India's oil bill elevated well above last year's levels.
For Indian policymakers, the data underscores a familiar strategic imperative: diversifying sourcing and accelerating the transition toward domestic and alternative energy.
India has been expanding its crude sourcing across geographies and investing in strategic petroleum reserves, but the scale of the import dependence — over 85 per cent of crude needs met through imports — means that global price shocks will continue to transmit directly into the country's trade balance, inflation, and fiscal math.
The September numbers are provisional and may be revised, but the direction is unmistakable. With the Indian crude basket having touched nearly $124 per barrel in mid-September and geopolitical risks still mounting, the October data, when it arrives, is unlikely to offer much comfort. For an economy that runs on imported energy, the oil bill has once again become the number to watch.
(Reporting based on The Hindu and Business Standard.)