Technoglitch
Core Member
With crude oil price touching 7-month high of $50 a barrel, Finance Minister Arun Jaitley has said India can handle the current level but higher rates will impact the economy and lead to inflationary pressure.
India, which depends on imports to meet 80 per cent of its oil needs, will have to spend Rs 9,126 crore ($1.36 billion) more for every dollar per barrel increase in crude oil prices while also seeing surge in inflation.
“Obviously higher crude price is not good news for India. But if it remains within a range, as it is at present, it is something that can be handled. If it goes beyond the range, then certainly it creates an adversity,” he told PTI.
Petrol prices have been hiked five times since March, totalling Rs 8.99 a litre while diesel rates have been raised by Rs 9.79 per litre as international oil prices climbed to $50 per barrel for the first time since October 2015.
Every rupee per litre increase in petrol price leads to 0.02 per cent rise in WPI inflation and by 0.07 per cent for the same amount of increase in diesel rates.
“In many ways it has also been obstructive. I say obstructive because there is lot more volatility today, lot more unpredictability today and more than that I think the shrinkage on global trade has impacted on all economies and therefore it has impacted on us.” In a helpful global environment for an economy to grow much faster, at 8-9 per cent, is reasonably possible but when the global environment is much adverse, to then maintain a 7.6 per cent growth rate is extremely critical, he said. “Once the growth returns to the world, I think this 7.6 per cent, we have a reason to look forward to, to enhance,” he said.
Higher oil prices may create adversity: Finance Minister Arun Jaitley | The Indian Express
India, which depends on imports to meet 80 per cent of its oil needs, will have to spend Rs 9,126 crore ($1.36 billion) more for every dollar per barrel increase in crude oil prices while also seeing surge in inflation.
“Obviously higher crude price is not good news for India. But if it remains within a range, as it is at present, it is something that can be handled. If it goes beyond the range, then certainly it creates an adversity,” he told PTI.
Petrol prices have been hiked five times since March, totalling Rs 8.99 a litre while diesel rates have been raised by Rs 9.79 per litre as international oil prices climbed to $50 per barrel for the first time since October 2015.
Every rupee per litre increase in petrol price leads to 0.02 per cent rise in WPI inflation and by 0.07 per cent for the same amount of increase in diesel rates.
“In many ways it has also been obstructive. I say obstructive because there is lot more volatility today, lot more unpredictability today and more than that I think the shrinkage on global trade has impacted on all economies and therefore it has impacted on us.” In a helpful global environment for an economy to grow much faster, at 8-9 per cent, is reasonably possible but when the global environment is much adverse, to then maintain a 7.6 per cent growth rate is extremely critical, he said. “Once the growth returns to the world, I think this 7.6 per cent, we have a reason to look forward to, to enhance,” he said.
Higher oil prices may create adversity: Finance Minister Arun Jaitley | The Indian Express
