AI-assisted research analysis by FutureKnowledge. Sources checked 19 October 2026. Figures are provisional official data as reported on the dates given. This is not investment advice.
India spent $90.6 billion importing crude oil between April and September 2026, about $29 billion more than a year earlier. It bought almost the same quantity of oil. The new half-year data from the government’s Petroleum Planning and Analysis Cell (PPAC) shows clearly what the Gulf war has cost India: the country is paying about 46% more for roughly the same oil. Below we look at why the bill rose, how it is reaching households and businesses, and what would ease or deepen the strain.
What happened
PPAC’s latest monthly ready reckoner, released late on Friday 17 October, puts India’s crude import bill for the first half of 2026-27 at $90.6 billion, up from $61.9 billion. ThePrint reported that import volumes barely moved, at 122.7 million tonnes against 121.8 million tonnes a year earlier. The increase is almost entirely about price. On FutureKnowledge’s own arithmetic, India paid an average of about $738 per tonne of crude in the half-year, compared with about $508 a year earlier.
September was the costliest month. According to Whalesbook’s summary of the PPAC data, the month’s crude bill was $15.4 billion, up from $10.5 billion. Volumes were 21.7 million tonnes, up about 7%. The Indian crude basket, the average price Indian refiners pay, averaged $116.09 a barrel in September, against $90.19 in August and $69.61 a year earlier. A separate report of the same data notes that the basket peaked at $130.19 on 15 September. It also puts India’s net oil and gas import bill at $81.1 billion for the half-year, up 35% from $60.2 billion.
The reports differ on LNG. One summary places an 8.5% fall in LNG volumes in the half-year figures, but the other reports show that fall was in September alone. ThePrint reports that half-year LNG imports rose 4.4%, as domestic gas output fell 4.4%. We follow that reading.
Why the bill rose so sharply
The cause is the war involving Iran and the disruption to shipping through the Strait of Hormuz, which has kept crude above $100 for much of the year. The risk has not eased. On 17 October, Middle East Eye reported, citing Iran’s state agency IRNA, that Iran’s Revolutionary Guards navy had again declared the strait closed to ships of all nationalities. This came after a supertanker caught fire in the strait. CGTN reported a second claimed mine explosion the same day. That claim came from the Guards and has not been independently verified. On Monday morning, Trading Economics data showed Brent around $107 a barrel. That was down about 2% on the day but about 76% higher than a year earlier.
India’s limited domestic supply makes the effect larger. ThePrint’s account of the PPAC data shows domestic crude production fell to 12.8 million tonnes from 13.2 million tonnes. Import dependence stayed at 88.1% of consumption. The country’s dependence on imported gas rose to 52.3% from 50.1%.
How it is reaching India’s economy
The external accounts
More dollars for oil means a wider trade gap. The Commerce Ministry’s September data, reported by ANI, showed merchandise imports of $74.61 billion and a goods trade deficit of $30.21 billion. Exports were strong, rising 23% to $44.40 billion, partly on higher shipments of petroleum products. That held the combined goods-and-services deficit to $13.30 billion. An ICICI Bank Global Markets projection, cited by Equentis, puts the full-year goods deficit at about $388 billion and the current account deficit at about 1.4% of GDP if crude averages around $95. That is a forecast, and crude has recently been well above $95.
Interest rates and inflation
The Reserve Bank of India’s 7 October policy statement raised the repo rate by 25 basis points to 5.50% and moved the stance to “calibrated tightening”. It described crude prices as volatile because of the West Asia conflict. The RBI projects inflation of 6.0% for October-December, against 4.9% for July-September.
What people are buying
The consumption data shows how demand is adjusting. Total petroleum product consumption fell 3.3% to 114.8 million tonnes in the half-year, ThePrint reported. LPG use dropped 15.5% to 13.7 million tonnes. Naphtha fell 18%, and bitumen and petcoke each fell 25.4%. Diesel rose 4.9% and petrol 7.1%. Construction World’s report of PPAC’s September data shows the LPG fall continuing, down 9.15% in the month, while diesel rose 6.55%. Transport fuel demand is holding up, while cooking gas and industrial feedstocks are falling.
Who is more or less exposed
These are general patterns, not views on any company.
- More exposed: businesses that use naphtha, bitumen or petcoke, such as petrochemicals, road construction and cement. The sharp volume falls suggest they face costly or scarce inputs. Airlines, logistics firms and importers of oil-linked raw materials also face higher costs., as do dollar borrowers if the trade gap weighs on the rupee.
- Mixed: refiners. Costlier crude raises their input bill, but strong export demand for fuels can support margins. Bloomberg reported in July that Indian refiners were earning more from fuel exports as global shortages spread. Fuel retailers whose pump prices are restrained carry more of the strain.
- Less exposed: service exporters with dollar earnings, and businesses whose costs are mostly labour or domestic inputs. City gas distributors may also see steadier demand as some households move from LPG cylinders to piped gas.
Scenarios to watch
The table below sets out conditional scenarios, not predictions. Each one describes what could follow if its condition holds.
| Scenario | Condition | Likely effect on India |
|---|---|---|
| Easing | Shipping through Hormuz resumes and the Indian basket falls back towards $90 | Monthly crude bill narrows from September’s $15.4 billion; less pressure on the rupee and rates |
| Plateau | Crude stays around $105-115 with periodic tanker incidents | Second-half bill similar to the first; inflation near the RBI’s 6% projection for October-December; demand for LPG and industrial fuels stays weak |
| Escalation | The strait remains closed or Gulf export terminals are hit | Possible supply shortfalls rather than only higher prices; wider deficit; more pressure for further policy tightening |
What to watch next
- PPAC’s October data and the Indian basket price for October.
- October trade data from the Commerce Ministry in mid-November.
- Whether Iran’s closure declaration changes tanker traffic and war-risk insurance costs.
- RBI data on the current account for July-September.
Bottom line
The half-year figures show that India is not buying much more oil. It is paying far more for the oil it needs. That roughly $29 billion increase is now showing up in the trade deficit, in a tighter RBI and in falling demand for cooking gas and industrial fuels. Strong exports are absorbing part of the shock, but the second half depends mainly on Gulf shipping, which Indian policy cannot control.
Method: this article compares reporting from ThePrint, Whalesbook, 10bmnews, ANI, Construction World, Middle East Eye and others with the Petroleum Planning and Analysis Cell’s September 2026 ready reckoner and the Reserve Bank of India’s 7 October 2026 policy statement. Per-tonne costs are FutureKnowledge calculations from reported totals. Projections are attributed to their authors; scenarios are FutureKnowledge analysis. Corrections: see our corrections page.