Government is closely watching spike in crude oil prices: Jayant Sinha

Government is closely watching spike in crude oil prices: Jayant Sinha

Government is watching global risk factors to the economy including spike in oil prices in the international market, Brexit and turmoil in the Middle East.

“There are a number of risk factors that we routinely consider. We discussed, for example, what will happen with oil prices and turmoil in the Middle East… We discussed Brexit as well, along with the risk factors that India has,” Jayant Sinha, minister of state for finance told reporters on the sidelines of the Rajasva Gyan Sangam.

As a net importer, India has significantly benefited from the recent low oil prices, which have now started inching up. The crude oil price has hit 11-month high of $50 per barrel.

Sinha had earlier said that government’s fiscal maths and inflation calculations would not be impacted if the oil prices stay below the $60 mark.

“If oil prices stay in the range that most forecasters are expecting them to be, which is in the $40-60 dollar range, then I think we will be fine. If it goes beyond that range, then it becomes a question,” Sinha had said earlier.

India, which depends on imports to meet 80% of its oil needs, will have to spend Rs 9,126 crore (USD 1.36 billion) more every year for increase of each dollar per barrel in crude oil. Besides, the rising crude oil trajectory impacts inflation and growth.

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