The oil glut between 2014 and late 2016 created a huge oil windfall for India, which benefited the Narendra Modi government in terms of fuel tax. As oil prices slumped to as low as $27 a barrel, it gave the government room to hike excise duty on petrol and diesel. However, since November of last year, the oil prices have remained volatile and moved unexpectedly, leaving policymakers and central banks in a state of flux.
The Saudi Angle:
The latest development is that in the last two months, Brent prices have slumped from a high of $86 a barrel to below $60 a barrel as the Organization of the Petroleum Exporting Countries (OPEC) decided to increase supplies.
In fact, the daily oil output of Saudi Arabia has reportedly surpassed record 11 million barrels a day, which lead to further fall in oil prices. Read More
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