Oil imports data shows drop in demand from consumers

The current oil imports data released by the Ministry of Commerce and Industry (MCI) shows signs of a long drawn economic slowdown in the country.

According to MCI data, oil imports in July 2019 were $9.60 billion (Rs 66,056.77 crore), which was 22.15% lower in Dollar terms (22.02% lower in Rupee terms), compared to $12.33 billion (Rs 84,707.59 crore) in July 2018.

Oil imports in April-july 2019-20 were $44.45 billion (Rs 3,08,455.32 crore) which was 5.69% lower in Dollar terms (3.03% lower in Rupee terms) compared to $47.13 billion (Rs 3,18,091.98 crore), over the same period last year, as per MCI data.

“In this connection, it is mentioned that the global Brent price ($/bbl) has decreased by 14.02% in July 2019 vis-àvis July 2018, as per data available from World Bank (Pink Sheet),” a MCI statement said.

On the one hand, the slower growth in oil imports is good news for the exchequer in terms of keeping the oil bill lower. On the other hand, it also indicates that there will be less consumption of petrol, diesel and aviation turbine fuel (ATF). This in turn indicates a slump in the economy and lowering of purchasing power of consumers in the market.

As per economic observers, if the tension in the Gulf region grows, it would cause more strain on the economy as the supply will go down and a consumption-supply imbalance may fuel price hike in petroleum products.

However, Union Finance Minister Nirmala Sitharaman on Friday announced troubleshooter measures for tackling the slowdown in the Indian economy, though most of these were a reiteration of measures already passed in the Union Budget in July.

Economy watchers believe that the steps taken by the Finance Minister will help in countering the slump in the economy and in making the people believe that the Prime Minister Narendra Modi-led government is taking the economy seriously.

What Sitharaman has announced is her first tranche of growth measures, as she said during her press conference, and the second round of announcements is likely to come by next week. “We will soon come forth with measures that the government is working on to help home buyers; another set of announcements will be made next week,” Sitharaman said at the press conference to announce the steps to improve the economy.