-- Increase in oil imports widens trade deficit, weakens rupee
-- Refined products consumption up due to higher vehicle sales, power shortages
-- Crude oil imports expected to surge in the coming years
(Recasts lead, adds product trade details, background throughout)
By Rakesh Sharma
India's crude oil imports rose 5.2% in the just-ended financial year due to refinery expansions and commissioning but also reflected the country's increasing dependence on imported crude for meeting the needs of its growing middle class and coping with rising power demand.
Essar Oil Ltd. (500134.BY) and Mangalore Refinery & Petrochemicals Ltd. (500109.BY) expanded capacity while Hindustan Petroleum Corp. (500104.BY) commissioned its joint venture refinery with billionaire Lakshmi Niwas Mittal in the northern state of Punjab.
The increase in oil imports, however, widened the nation's trade deficit and weakened the rupee against the dollar.
Crude oil imports in the financial year ended March 31 rose to 172.11 million metric tons or 3.45 million barrels a day from 163.59 million tons or 3.29 million barrels a day in the year-earlier period, data from the Petroleum Planning and Analysis Cell's website showed Monday.
The PPAC is the data analysis wing of the federal oil ministry.
India meets three-fourths of its oil needs through imports and secures crude mainly from Saudi Arabia, Iran, Iraq, Nigeria and United Arab Emirates.
The South Asian nation's oil import bill surged 41% to $141.08 billion due to the higher volumes and a 32% increase in average benchmark Brent oil prices to $114.66 a barrel, PPAC data showed.
This led to a 56% increase in the country's trade deficit, which rose to its highest-ever level of $184.9 billion.
The PPAC didn't provide a breakdown of imports by country.
Essar Oil raised the capacity of its Vadinar refinery in the western state of Gujarat by 29% to 18 million tons during the last financial year. Mangalore Refinery raised its capacity by 27% to 15 million tons during the same period.
India's crude oil imports are expected to surge over the long term because fuel product consumption is expected to grow more than 4% annually over the next 10-15 years as the nation invests in building infrastructure and its expanding economy leads to a rise in vehicle sales, leading refiners to boost investment in capacity.
Refined fuel products consumption rose 4.9% last fiscal year to 147.99 million tons, at its highest pace since 2007-08, due to growth in vehicle sales and with power shortages boosting diesel demand for running generators.
Fuel product imports fell 14% to 14.92 million tons, while product exports rose 2.4% to 60.52 million tons from the year-earlier period, the data showed.
-By Rakesh Sharma, Dow Jones Newswires; +91-11-4356-3334; [email protected]