New Delhi: India’s oil import bill may go up in the range of $25-50 billion in fiscal year 2019 (FY19) if oil prices remain high, but this will not impact the country’s macroeconomic stability, economic affairs secretary Subhash Chandra Garg said on Friday.
Garg remained non-committal on a possible cut in excise duty on petrol and diesel, but said the government is keeping a close watch on the situation.
He also hinted that prices could get corrected in the coming days.
“Under different scenarios, we see the oil import bill going up in the range of $25 billion to a maximum of $50 billion,” said Garg. India spent $72 billion on oil imports in FY18.
The macroeconomic situation continues to be sound, inflation is under control and the government is making sure there is no adverse impact on fiscal deficit, Garg said at a press briefing. India’s economic growth rate remains strong, he added.
The price of the Indian basket of crude oil touched $83.81 a barrel on Friday, up from $46.56 a barrel in last June, following a gradual increase.
With prices firming up, state-owned oil companies have been slow in passing on the increase to customers, keeping in mind consumer interest.
“Even if (crude oil) price remains somewhat elevated, we might and should see strong economic growth,” said Garg. As the government is not subsidizing petrol or diesel prices, higher prices may not impact the exchequer adversely, he said.
However, despite the government’s claims that high oil prices may not impact its finances on account of market pricing of auto fuel, its dividend income from state-owned oil retailers could take a hit if they do not fully pass on the increase to customers.