Average crude prices in FY25 to be USD 83-88, potentially raising government fiscal burden, CRISIL

A Crisil report projects that average crude oil prices are expected to rise to $83-$88 per barrel in fiscal year 2025, up from $83 per barrel the previous year.

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This anticipated increase could strain India’s fiscal budget, considering the country’s heavy reliance on crude oil imports, which account for over 80 percent of its domestic needs. The report also forecasts India’s real GDP growth at 6.8% for FY 2024-25, with consumer price inflation expected to soften to 4.5%.

In June, Brent crude oil prices were relatively stable at an average of $82.6 per barrel, marking a 0.7 percent increase month-onmonth and a 10.2 percent rise year-on-year. The budget aims to reduce the central government’s fiscal deficit to 5.1 percent of GDP in fiscal 2025 from 5.6 percent the previous year. Notably, the center’s fiscal deficit in the first two months of fiscal 2025 stood at 3 percent of the budget target, a significant improvement from 11.8 percent during the same period last fiscal year.