Oil companies $ demand spikes 45% on high crude, RBI raises credit limit

NEW DELHI: Raging crude prices have jacked up dollar demand from oil companies, a factor contributing to the rupee’s fall and prompting the RBI to raise the limits under the revolving credit facility for them by 50%, industry executives in the know said.
Executives at state-run oil refiner-fuel retailers said their dollar requirement has gone up sequentially by about 40-45% in the first half of the year compared to the second half of 2021 but declined to share the numbers.
They allayed fear of any dollar shortage, saying in addition to the revolving credit for crude purchase, the companies also have limits available under additional dollar window opened in 2018 for capital expenditure.
The executives said a surge in fuel demand amid elevated oil prices has added to their forex requirement. “We are buying more barrels to keep the market supplied. We also imported diesel to meet a demand spike in June. At today’s elevated prices, it takes more dollars to pay for them than six months ago,” one industry executive said, requesting anonymity.