Data sourced from the commerce department showed that during April-July, India’s mineral oil imports from Russia soared over eight times to $11. 2 billion, compared with $1. 3 billion in the corresponding period last year. Since March, when India stepped up imports from Russia, imports have topped $12 billion, against just a shade over $1. 5 billion last year. Around $7 billon of these imports took place in June and July.
To put things in perspective, refiners buy oil and not the government. But cheaper oil has a positive impact on macroeconomic parameters of the economy. They keep costs down, the current account deficit in check by lowering the import bill and reducing dollar demand. The government’s subsidy bill also comes down, leaving money for social welfare and infrastructure. This is the second time that bargain hunting in the global oil market has saved India money. In 2020, when oil prices crashed as the pandemic shut down the world, the government filled up strategic reserves and refiners stored oil in ships to save Rs 25,000 crore when prices rose later, first reported by TOI on May 5 that year.