New Delhi: India’s average crude oil import price fell to $71.20 a barrel marking a 42-month low, the Hindustan Times has reported.
However, the benefit of this decline is unlikely to be felt by consumers who are still buying petrol and diesel at high retail prices.
The fall in crude oil price can be attributed to the Chinese economic slowdown, US ceasefire efforts and President Donald Trump’s push for American oil, the report said.
The last time the average monthly import price of crude for India fell below $70 a barrel was in August 2021.
Since then, the monthly average has increased due to various ongoing conflicts like the Russia-Ukraine ware in 2022 and the Israeli genocide in Palestine. India’s current annual average crude import price is also the lowest it has been since 2020-21, the report said
Data shows the average price per barrel for recent years:
- 2020-21: $44.82
- 2021-22: $79.18
- 2022-23: $93.15
- 2023-24: $82.58
- FY25 (up to March 15, 2025): $78.49.
Indian basket prices had peaked at $116.01 per barrel in June 2022, before stabilising below $100 per barrel.
Industry experts cited in the report cautioned that India’s retail prices of petrol and diesel are not in tandem with the price of crude oil in the international market. Private refiners operate at a margin of about Rs 10-12 per litre on the two automobile fuels, they said, adding that global oil prices are expected to remain low in the coming months.
RBI’s monetary policy committee too said that global oil prices are expected to remain subdued, citing the Chinese slowdown, Middle East ceasefire, prospects of Ukraine conflict resolution and increased US oil production.
“Globally commodity prices are softening due to several factors. The crude oil prices are likely to head downwards due to the Chinese slowdown, the recently announced ceasefire in the Middle East with the prospects of the Ukraine conflict also brightening with the Trump 2.0 Presidency which is also likely to enhance the US output of oil and growing dependence on renewables,” the minutes of the committee meeting published on February 21 said.
Trump has also requested OPEC to lower oil prices to support economic growth. During his first term (2017-2021), India’s crude oil import price averaged $57.75 per barrel. Experts estimate that oil prices for 2025-26 could range between $65 and $73 per barrel, the paper reported.
Why are Indian consumers paying a high retail price?
The Modi government has been criticised for not passing on this price reduction to the end-buyer. The government has contained the prices of oil products in a narrow band using its taxation policy.
The tax component in the prices of motor spirits has been a major source of revenue for the Union government. Taxes on oil and petroleum products form a major part of the retail prices borne by the consumers.
The high excise duty despite record-low international crude prices has resulted in significant windfall gains for the Union government through excise tax revenue.
