Is this the harbinger of real slowdown of Indian growth wagon? Falling imports of crude oil does not augur well for the economy. India’s June crude oil imports fell 13.4 per cent from a year earlier to their lowest since February 2017, according to official data.
Crude imports into the world’s third-biggest oil importer fell to 16.87 million tonnes, which was also a more than 10 per cent drop from May’s 18.87 million tonnes, Reuters reported citing latest government data.
June’s decline came amid the loss of Iranian oil supplies as Washington tightened sanctions on Tehran.
In April, Trump administration had said it would not renew exemptions granted last year to buyers of Iranian oil. India through May was Iran’s second-biggest oil customer after China.
Meanwhile, imports of oil products surged by about 20.4 per cent from a year earlier, while year-on-year exports slipped 11.4 per cent last month, the data showed.
Diesel exports climbed almost 6 per cent to 2.22 million tonnes on June month-on-month, although they have been down 9.4 per cent from a year earlier, resulting from weaker demand in the domestic sector because of the monsoon season.
However, monsoon rains typically reduce the necessity for diesel used in irrigation pumps. India’s robust diesel demand growth is prone to decouple from the automobile market as motorists more and more flip to gasoline vehicles, leaving it extra reliant on patchy demand from construction and heavy industry. That the automobile sales have also been dwindling constantly over the past few months, is another cause for concern.