Afall in oil demand during the lockdown has reduced the prices and the amount of import but has helped to reduce the import bill as well as the country’s current account deficit at a time the Modi government is scrambling to find resources to meet the shortfall in revenue that is set to ratchet the fiscal deficit upward in this fiscal.
The low oil price of around $20 a barrel in April and expectations that crude may average between $30-40 a barrel in this fiscal mean the oil import bill could reach an all-time low in this fiscal — with estimates at $64 billion.
