India, the world’s third largest oil importing and consuming nation, is probably going to save as a lot as Rs 1.8 lakh crore on import of crude oil and LNG if the development of softening worldwide power charges continues, Icra mentioned Wednesday. India, which meets over 85 per cent of its crude oil wants via imports, spent USD 242.4 billion on shopping for crude from abroad within the fiscal 12 months ended March 31, 2025. With home manufacturing assembly roughly half of the demand, it additionally spent USD 15.2 billion on import of liquefied pure fuel (LNG) within the fiscal.
Oil prices in worldwide markets fell to over 4-12 months low of USD 60.23 per barrel earlier this week on fears of rising global provide at a time when demand outlook is unsure. Brent crude and US West Texas Intermediate crude, which fell to their lowest since February 2021, have since risen to USD 62.4 on indicators of extra Europe and China demand and fewer US output. Nonetheless the charges are USD 20 per barrel decrease than March 2024 when petrol and diesel prices had been reduce by Rs 2 per litre every forward of common elections.
“Icra expects common crude prices for FY2026 (April 2025 to March 2026 fiscal 12 months) to stay within the USD 60-70 per barrel vary,” the score company mentioned in a observe.
At these ranges, earnings of upstream firms is estimated at Rs 25,000 crore for FY2026.
Upstream firms are ones that produce crude oil.
“Nevertheless, there can be financial savings of Rs 1.8 lakh crore for crude imports and Rs 6,000 crore for LNG imports,” it mentioned.
For gas retailers, the advertising margins on auto-fuels will stay wholesome, whereas LPG below-recoveries are possible to scale back, Icra mentioned.
Uncertainty associated to global tariffs and their affect on development, coupled with an announcement by OPEC+ to steadily withdraw their manufacturing cuts, beginning with 411,000 barrels per day addition from Might 2025 and one other 411,000 bpd from June 2025, have resulted in oil prices declining from about USD 77 a barrel as on March 31 to about USD 60-62.
Stating that India meets a big portion of its home crude oil necessities via imports, Icra mentioned within the situation the place crude stays in USD 60-70 a barrel vary, the revenue earlier than tax for upstream gamers in FY2026 is predicted to be decrease by Rs 25,000 crore. Despite this, Icra foresees the capex plans of home upstream gamers to stay intact.
Advertising and marketing margins on auto fuels for oil advertising firms (OMCs) would stay above long run common of Rs 2.5-4 a litre and below recoveries on LPG are anticipated to scale back with decline in crude prices.
Whereas petrol and diesel prices are deregulated, the federal government controls cooking fuel LPG prices. OMCs promote the gas at manner under value and are compensated for the below-restoration by the use of subsidy from the federal government.
Decrease LPG below-restoration and compensation by the federal government would assist profitability of downstream firms, regardless of the rise in excise responsibility on auto fuels by Rs 2 a litre with impact from April 8, 2025.
Nevertheless, there can be stock losses for refiners owing to the sharp decline in crude prices. Furthermore, additional hikes in excise responsibility can’t be dominated out.
Icra mentioned the pricing for Administered Worth Mechanism (APM) fuel and LNG imported from Qatar are linked to crude oil prices. “Decline in crude prices will lead to a moderation in fuel prices, which may translate to important financial savings on time period LNG imports. If crude oil prices maintain between USD 60-70 per barrel, Icra initiatives the financial savings in Qatar LNG imports at Rs 6,000 crore in FY2026 vis-a-vis FY2025,” the observe added.
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