New Delhi: The strong economic recovery and rising demand post the second wave of coronavirus coupled with a spike in global oil prices may pose a challenge for the government in FY22 to maintain fiscal discipline amid good growth in tax revenue.

The country’s crude oil Import bill that declined considerably last year in the absence of demand and soft oil prices, has risen by over 138 percent in April-August of FY22 to USD 42 billion, up from close to USD 18 billion the same period of last year. During the period, crude has jumped by about 40 percent from USD60 a barrel to more than USD85 a barrel now. This price pressure has come when demand for petroleum products is on a rise in the country already reaching pre-Covid levels and rising. All this has meant that India is not only importing more to meet additional demand but is doing it at premium prices ballooning its import bill.

In the April-August period of the current year, India imported 83.8 million tonnes of crude, up from 74 million tonnes of imports in the same period last year. In the month of August, India imported 17.4 million tonnes of crude by paying USD 9.1 billion. This is higher than 16.9 million tonnes of imports at USD 5.5 billion last year in August. Interestingly, India's oil import bill stood at USD 62.7 billion in FY21. This number may well be broken in the first six months of the current fiscal indicating a big jump in oil import bill is coming.

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