Lower Crude Prices Offer Relief to Odisha’s MSMEs by Easing Fuel and Logistics Costs

Lower global crude oil prices are easing pressure on India’s oil import bill and offering some relief to states like Odisha, where fuel and transport costs have remained a major concern for small businesses.

In 2025, Brent crude averaged around $68 per barrel, nearly 19 per cent lower than in 2024. The Indian basket of crude fell to a 58-month low of $62.20 per barrel in December and slipped further to $59.29 in early January 2026. Since India imports over 88 per cent of its crude oil requirements, the fall in prices has had a visible impact on costs. Between April and November of FY 2025–26, India saved an estimated $11 billion on an annualised basis, even though import volumes rose by 2.44 per cent to 163.4 million tones.

For Odisha, the impact is being felt most strongly by the MSME sector. The state has over 19.84 lakh MSME units, employing around 19.35 lakh people, many of whom operate in transportation, agri-processing, small manufacturing and local trading. Fuel and logistics typically account for 20 to 40 per cent of operating costs for these businesses. Recent price moderation has helped bring down freight expenses by about 3 to 5 per cent, offering some margin relief.

Lower fuel costs have also helped cool inflation. National CPI inflation eased to 0.71 per cent in November 2025, down from 4.26 per cent in January 2025, reducing input costs for petroleum-based materials such as plastics, chemicals and lubricants.

With industry contributing about 43 per cent of Odisha’s GSVA, stable energy prices play a critical role in business continuity. While crude prices remain subject to global shifts, the current decline has given MSMEs in the state some much-needed cost stability