n the first half of January 2016, the price of crude oil fell to a 12-year low of below $30 per barrel.[1] This is a windfall for India, which imported 1,086 million barrels of crude oil and petroleum products in FY15.[2] If the current prices sustain, India will save close to $80 billion from its import bill, annually. This has benefited consumers, who are paying less for petrol and diesel, as well as the government, which gave almost $15 billion in fuel subsidy during FY14.[3]
The time is right for Indian policy-makers to lock-in energy prices for the long-term at current levels. Not only will this consolidate the gains, but even other long-term solutions—acquiring oil fields, pushing for renewable energy, and adopting electric vehicles—won’t help if there is a price spike in the short-term.