Indian crude basket nears $120/bbl in October, highest since March 2012
Why in the news
The Indian basket of crude oil has averaged roughly $120 per barrel so far in October 2026, its highest monthly level since March 2012. The spike is squeezing oil marketing companies (OMCs) and putting pressure on inflation and the Centre’s finances.
Key facts
- Indian crude basket: about $120/bbl in October 2026; last higher in March 2012, when it averaged $123.61/bbl.
- WPI inflation stayed close to 10% from May and climbed to 11.4% in September.
- RBI lifted the repo rate by 25 basis points to 5.5%, moved its stance from neutral to “calibrated tightening” and raised its CPI forecast to 5.2% from 5%.
- Crude imports jumped 46.4% to $90.6 billion in April-September 2026-27; the net oil and gas import bill rose 35% to $81.1 billion.
- Fuel taxes: the government cut the special additional excise duty on petrol and diesel by ₹10 per litre; excise collections fell about 23% to ₹86,687 crore in April-August.
- Fertiliser subsidy (Budget Estimate ₹1.70 trillion) could cross ₹3 trillion, a record.
- Global prices: on 26 October Brent eased 1.1% to $115.41 and WTI 1.6% to $101.62, after touching near six-month highs.
Basket price trend
| Period | Average ($/bbl) |
|---|---|
| March 2012 | 123.61 |
| Q1 FY27 (April-June 2026) | 101.31 |
| Q2 FY27 | 96.11 |
| October 2026 (so far) | about 120 |
About the impact
OMCs raised pump prices by about ₹7.50 per litre in four rounds in May. ICRA had put under-recoveries on 23 September at ₹8/litre on petrol and ₹9/litre on diesel; the diesel gap has since nearly doubled to about ₹20/litre. HPCL is seen as the most exposed of the three OMCs. Economist Madan Sabnavis expects the fiscal deficit at 4.6% of GDP against the budgeted 4.3%.
Exam angle
- Brent and WTI are global benchmarks; the Indian basket is India’s own reference price.
- Repo rate now 5.5%; RBI stance “calibrated tightening”.
- Link costly crude to WPI inflation, current account deficit and fiscal deficit.