With geo-political factors impacting crude prices, India needs to have a good oil hedging policy as the volatility will continue to rise, former Reserve Bank of India (RBI) Governor, Raghuram Rajan said Wednesday.
Rajan said the issue has been discussed in the past and it began with a strategic petroleum reserve, but beyond that there is a need to think about hedging oil prices especially when it comes to levels such as now.
“There is a very strong need for an oil hedging mechanism for a country like ours which is so dependent on oil,” Rajan said in a pre-recorded interview being telecast at Times Network’s India Economic Conclave.
The problem is many who are entrusted with this, fear the chance of oil prices falling even further if you hedge it, but that has to be taken as a national consequence of the hedging programme. “We, as a country, must think about whether we should start this process,” he said. Read More