Opec move not to hit India

Every $1-a-barrel surge in international crude prices following the decision of the Organisation of Petroleum Exporting Countries (Opec) to cut production will push up India's oil import bill in the remaining six months of the current financial year by at least Rs 1,200 crore.

This would imply that as per current estimates, the country's oil import bill for 2003-04 will come to around Rs 87,200 crore in case international prices of the benchmark Brent (dated) crude jump from around $ 26 a barrel to $ 27.

The petroleum ministry had earlier estimated the import bill at Rs 86,000 crore with the Brent (dated) prices ruling at $ 26 a barrel.

However, every Re 1 appreciation in the value of the rupee against the dollar will offset this increase by Rs 600 crore during the remaining period the current financial year.

Opec had yesterday decided to cut production by 9 lakh barrels a day bringing the output ceiling down from 25.4 million barrels per day to 24.5 million barrels.

Petroleum ministry officials, however, are confident that the Opec decision will not have much impact on India since the country had enough crude oil stocks to withstand an immediate surge in its international prices.

According to them, the country imported 20 per cent more than its requirement in the first quarter of 2003-24 which should act as a buffer now.

The officials are of opinion that the production cut may not be effective since Iraq is planning to increase its crude oil production soon.

At present, Iraq is producing 1.8 million barrels per day and plans to take up to 2 million barrels per day by December, 2.8 million barrels per day by next March-end, 3.5-4 million barrels per day by 2005 and to 6 million barrels per day by the end of the decade.

PTI adds: India's crude oil import bill has jumped by over 19 per cent to $ 5.615 billion in the first four months of the current financial year compared with $ 4.731 billion spent in the same period last year.

"India imported 30.198 million tonnes of crude oil for $ 5.615 billion (Rs 26,276 crore) in April-July as against 26.474 million tonnes crude imported for $ 4.731 billion (Rs 23,154 crore) last year," official sources said.

Besides crude, the country also imported 1.277 million tonnes of petroleum products for $284 million, which was lower than last year's import of 2.154 million tonnes of product imports for $460 million.

The total oil imports (crude plus product) was 13.68 per cent higher at $5.98 billion compared with $5.260 billion imports of April-July 2002.

Government sources said India exported 4.321 million tonnes of products, mostly diesel and petrol, for $964 million in the first four months of current financial year.

Sluggish domestic demand saw diesel exports more than double to 1.856 million tonnes ($390 million ) this year, compared with the export of 812,000 tonnes ($164 million) in April-July last year.