A sharp decline in India’s average crude oil import price boosts hopes for petrol and diesel price cuts, while government hikes excise duties to absorb gains.
April 15, 2025: In a major development that could ease inflationary pressure and support economic stability, India’s average crude oil import price has dropped below $70 per barrel — a first since August 2021. As of Friday, the average cost stood at $69.39 per barrel, down more than 22% from $89.44 in April 2024, according to sources familiar with the data.
This sharp decline aligns with a global drop in crude prices. On Monday, benchmark Brent crude opened under $65 per barrel, driven by recession fears amid rising US-China trade tensions and weak global demand forecasts. Financial giants like Goldman Sachs now predict Brent could average around $63 for the rest of 2025. OPEC too has slashed its oil demand growth estimates for both 2025 and 2026.
Given that India imports over 87% of the crude it refines, and crude accounts for about 90% of refinery input costs, falling prices provide a potential lifeline for oil marketing companies (OMCs) and consumers alike.
Despite this, the government has opted to increase excise duty on petrol and diesel by ₹2 per litre (effective March 8), using the windfall to cross-subsidize LPG cylinders. According to petroleum minister Hardeep Puri, public sector oil firms currently hold inventory bought at approximately $75 per barrel, and prices at the pump may only drop once average stock costs fall further.
Inventory & Price Margins
The last consumer price cut was in March 2024, when petrol and diesel rates were slashed by ₹2 per litre each. Back then, India’s crude cost averaged $84.49 per barrel. With April’s cost now at $69.39, OMCs are reportedly earning margins of ₹10-12 per litre — yet retail prices remain unchanged.
On April 8, Indian Oil Corporation cut the base price of petrol by ₹2 per litre, but this was immediately offset by a matching increase in excise duty, keeping Delhi’s retail price steady at ₹94.77 per litre. The same was done for diesel, whose price held at ₹87.67 per litre.
What’s Next?
Experts suggest that if global crude prices stabilize around $60-65, and inventory costs follow suit, the government may finally allow fuel prices to come down — passing some relief to Indian consumers.
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