UPSC Prelims Practice Questions — India’s crude imports rise 7% in September, bill surges 47%

Q1. In September 2026, the volume of India's crude oil imports rose by about 7% over September 2025, while the crude import bill, measured in US dollars, rose by about 47%. Which of the following inferences can validly be drawn from the above?

  1. The average dollar price paid per tonne of imported crude was substantially higher than a year earlier.
  2. India's domestic consumption of petroleum products rose by close to 47% over the year.
  3. The share of West Asian suppliers in India's crude import basket must have risen over the year.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1 and 2 only
  • D. 1 and 3 only

Q2. With reference to India's oil trade statistics, consider the following statements: Which of the statements given above is/are correct?

  1. India's net oil import bill is smaller than its gross oil import bill because India exports refined petroleum products.
  2. A fall in the volume of India's petroleum product exports necessarily lowers the earnings from those exports.
  3. India's net oil and gas import bill can rise in a month even if the volume of crude imported falls.
  • A. 1 only
  • B. 1 and 2 only
  • C. 1 and 3 only
  • D. 2 and 3 only

Q3. With reference to India's Strategic Petroleum Reserves (SPR), consider the following statements: Which of the statements given above are correct?

  1. The reserves are held in above-ground steel storage tanks located within refinery premises.
  2. Crude stored in the SPR caverns by a foreign national oil company becomes the property of the Government of India once it is stored.
  3. In an emergency, the Government of India has the first right over the entire crude stored in the caverns, including crude stored by commercial lessees.
  4. Phase II reserves are planned under a public-private partnership model rather than being built wholly with public funds.
  • A. 3 and 4 only
  • B. 2 and 3 only
  • C. 2, 3 and 4 only
  • D. 1, 3 and 4 only

Q4. With reference to strategic and commercial crude oil stocks in India, consider the following statements: Which of the statements given above is/are correct?

  1. The days of crude demand covered by the strategic reserves are in addition to the inventory that oil refining companies hold for their own operations.
  2. Oil refining companies can draw crude from the strategic reserve caverns whenever their own inventories fall below operating requirements, without any decision of the Government.
  • A. 1 only
  • B. 2 only
  • C. Both 1 and 2
  • D. Neither 1 nor 2

Q5. Suppose international crude oil prices rise sharply and stay high. With reference to India, other things remaining equal, consider the following statements: Which of the statements given above is/are correct?

  1. The current account deficit tends to widen.
  2. The rupee tends to come under depreciation pressure, which further raises the rupee cost of oil imports.
  3. If the Government absorbs the price rise instead of passing it on to retail fuel prices, the inflationary impact becomes larger while the fiscal deficit remains unaffected.
  • A. 1 only
  • B. 1, 2 and 3
  • C. 2 and 3 only
  • D. 1 and 2 only

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. For India, a sharp rise in international crude oil prices widens the current account deficit as a share of GDP even if GDP growth accelerates.
  2. Faster GDP growth reduces an economy's demand for imported crude oil.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q7. Until Russia's invasion of Ukraine, the Middle East supplied over 60% of India's crude imports; Russia has since become India's largest supplier. Yet in September 2026, amid resurging conflict in West Asia, India's crude import bill rose about 47% while import volumes rose about 7%. Which of the following inferences can validly be drawn from the above?

  1. India stopped importing crude from West Asian suppliers in September 2026.
  2. Diversifying the geographic sources of crude does not by itself shield an importer from a rise in the global price of crude.
  3. Crude purchased from Russia is priced independently of movements in global benchmark prices.
  • A. 1 and 2 only
  • B. 3 only
  • C. 2 only
  • D. 2 and 3 only

Q8. With reference to blending ethanol into petrol in India, consider the following statements: Which of the statements given above is/are correct?

  1. Domestically produced ethanol blended into petrol displaces part of the crude oil that would otherwise be imported, saving foreign exchange.
  2. Higher blending ratios reduce how strongly the oil import bill responds to a given rise in global crude prices.
  3. For a given volume of ethanol blended, the foreign exchange saved is larger when global crude prices are higher.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 1 only
  • D. 1 and 2 only