Business

Rise In Crude Oil Prices Effects Indian Economy Adversely: Report

NEWS WORLD INDIA | 0
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| May 19 , 2018 , 17:47 IST

India's import bill could overinflate by $25-50 billion in the current financial year due to rise in crude oil prices as India is the world's third-largest oil consumer after US and China,

India depends more than 80 percent on imports to meet its oil needs as India imports about 1,575 million barrels of crude oil on an annualised basis.

Brent crude oil prices on Thursday hit $80 per barrel for the first time since November 2014 on supply deficit concerns and worries that it could spike further given the geopolitical concerns.

Department of economic affairs secretary Subhash Garg said: "If the prices go up obviously this will have an impact but under different scenarios, we see the impact ranging from roughly about $25 billion to a maximum $50 billion”.

According to him, the fiscal deficit is under control, country's growth parameters remain strong and borrowing programme remains on course.

Adding on Garg said on Friday evening “Fiscal deficit programme has been going on very smoothly there is has been no reason for us to believe that there will be any greater impact. Growth parameters are also very sound, macroeconomic parameters also continue to be very sound, the inflation is within the range

According to the ratings of CARE, a dollar increase in oil prices would increase the import bill by roughly $1.6 billion (Rs 10,000 crore) on an annual basis. This is how the Indian economy will be affected due to the surge in oil prices.

According to the government, there is no reason for panic as the macroeconomic fundamentals will remain sound.