The country's oil import bill may go up 20 per cent this fiscal because of international prices of crude continuing to rule above $30 a barrel and the Brent breaching the $32-a-barrel mark on Friday.
"Though earlier we had expected the oil import bill to be around 17.83 per cent higher than last fiscal's Rs 67,107 crore (Rs 671.07 billion) bill, the continuing war threat in West Asia and the hardening of oil prices is making us look at these figures again," petroleum ministry sources said.
According to the latest estimates prepared by the petroleum ministry, the country is expected to import crude oil and petroleum products worth Rs 80,528 crore (Rs 8505.28 billion) as against the earlier estimates of Rs 79,076 crore (Rs 790.76 billion).
The ministry has estimated that every one-dollar increase in international oil prices translates into a Rs 3,000 crore (Rs 30 billion) increase in India's oil import bill annually.
The ministry is concerned over the continuing hardening of the oil prices since it will push up domestic prices of petroleum products.
Now that the oil pool account has been abolished, petroleum ministry sources say there will be no cushion to prevent the rise in international crude oil prices from being passed on to consumers.
Petroleum ministry estimates show that for every one-dollar increase in the price of a barrel of crude, diesel prices will go up by 45 paise a litre and petrol prices by 55 paise a litre.
However, thanks to the increased refining capacity in the country, total exports of petroleum products this fiscal are expected to touch Rs 12,059 crore (Rs 120.59 billion) as against Rs 8,219 crore (Rs 82.19 billion) in 2001-02 -- an increase of 46.72 per cent.