According to Economic Times, India’s crude oil import basket does not yet include deeply discounted Russian oil imports that would reduce the true cost of crude imports. About one-third of crude oil is being imported by domestic refineries, suggesting that the actual crude basket cost is much lower than the current rate.
This situation could affect policy making and consumer prices, says Sunil Kumar Sinha, principal economist at India Ratings and Research. The government refers to the Indian crude oil basket when making policy, taxation, and gas price decisions. The share of Russian oil imports has increased to 35% in recent months, up from about 20% in FY23.
