The World Bank has projected a 20% jump in global prices of energy commodities – crude oil, gas and coal – this year, indicating a continued squeeze on fuel consumers in India and raising the prospect of cramping the government’s social spending ability as it heads back to people for another mandate.
According to the Bank’s April commodity markets outlook, oil prices will average $65 a barrel through 2018, 22% higher than the average price of $53 in 2017, due to the combined effect of production cut by Opec and Russia – the largest exporter outside the grouping of 14 oil exporting countries – and an uptick in demand.
This is not good news for India, which imports 80% of its crude requirement. Already, pump prices are at multi-year highs as Brent hovers near $74 a barrel mark. Brent holds a big sway over the overall cost of India’s crude purchase since it has 28% weightage in India’s oil basket. Read More