Oil above $75 a barrel raises concerns over macroeconomic indicators
The price of Brent crude saw a 40 per cent fall in Q3 FY19, followed by a 50 per cent rise in the subsequent quarter.
In the first month of FY20, crude oil crossed $75/bbl, raising concerns about the import bill, fear of rise in retail prices, and putting the two deficits, current account deficit and fiscal deficit, at a potential risk.
Chart 1 shows that oil price has been gradually rising since January 2019. However, what can be linked to the general elections, the retail prices are not rising that fast, as Chart 2 reveals. Petrol still costs Rs 73/litre in Delhi, quite less than Rs 76-79/litre when oil was hovering near $75/bbl in the last two instances.
