India is staring at an oily problem. Importing over 80 per cent of its oil requirement, the country is still heavily dependent on the vagaries of international oil and gas price trends to keep its expenditure in check. The last three years have seen a rare respite as prices crashed to below $50 per barrel, after years of $100 plus prices. The resurgence of rates in second half of 2017 however is spurring rising concerns.
Brent crude, forming the lion’s share of the crude basket, has already breached the $60 mark —racing from $44.82 on June 22, to $66.87 on December 29, 2017. This rise is already set to push up the country’s crude import bill for the current fiscal (2017-18) by as much as 15 per cent, according to sources.
A CARE Ratings report published late last year estimates that a dollar increase in prices on a permanent basis would increase the bill by roughly Rs 10,000 crore on an annual basis. “If prices do reign at above $60/barrel, then there would be pressure on the import bill by around $8-10 billion,” the report said. Read More…
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