Drop in Crude Oil Price
Market Expertz | November 20, 2018
The entire exercise of Budgeting in India has to factor in the most important variable which is the price of the Indian basket of the crude oil. If the government plans for a price of $65 average and the prices rise to $80-$85, the fiscal deficit and the current account deficit take a straight hit. Fortunately, this year after September, the prices showed a decline in trend and from $80 per barrel plus, the prices suddenly went down to $67 per barrel for the Indian basket. This has happened due to the complex mix of Global factors including America’s granting of oil purchase waiver for 8 nations after the Iran sanctions were put which has actually surprised the Kingdom of Saudi Arabia, increase shale output and some even saying that the demand for global fossil fuel is going down. Whatever it may be as far as India is concerned, dropping crude oil prices are blessing. One only hopes that the trend continues.