India's Fuel Bill To Rise On Stopping Purchase of Russian Crude
The SBI report also highlighted that while the potential increase in the import bill is significant, India’s diversified supply network and established contracts with other oil-producing nations may help cushion the impact
New Delhi: India is likely to face a significant jump of about $12-billion oil import bill if the country stops buying Russian crude oil for the rest of the financial year 2025-26. “The fuel bill is expected to surge by $9 billion in FY26 and $11.7 billion in FY27 due to an increase in prices,” a SBI report said on Friday.
The SBI report also highlighted that while the potential increase in the import bill is significant, India’s diversified supply network and established contracts with other oil-producing nations may help cushion the impact. “However, a rise in global crude prices due to reduced Russian exports would still put upward pressure on costs,” it said.
India being the world’s third-largest oil importer has a refining capacity of about 5.2 million barrels per day, including 1.24 million barrels per day from its massive Jamnagar facility alone. The International Energy Agency (IEA), however, projects the country’s demand will rise by another 1 million barrels per day by 2030.
Russia accounts for roughly 10 percent of the world’s crude oil supply. “If all countries were to stop buying Russian oil, crude prices could climb around 10 per cent, assuming no other producers step in to fill the gap,” SBI said in its report.
India began buying heavily discounted Russian crude — capped at $60 per barrel — in 2022, after Western sanctions on Moscow over the Ukraine invasion forced many nations to shun its oil. The strategy was aimed at ensuring energy security while keeping costs down.
“As a result, Russia’s share of India’s oil imports soared from 1.7 per cent in FY20 to 35.1 per cent in FY25, making it India’s single largest supplier. In FY25 alone, India imported 88 million metric tonnes (MMT) of crude from Russia out of a total of 245 MMT,” the report pointed out.
Before the Ukraine war, Iraq was India’s top crude supplier, followed by Saudi Arabia and the United Arab Emirates (UAE). However, India has diversified its oil sources significantly, not just increasing its purchases from Russia but also diversifying its oil sources to about 40 countries. New supply options have emerged from Guyana, Brazil, and Canada, adding to the country’s energy security.