Oil on the boil: Prices, demand-supply dynamics, and the way ahead

Brent crude, a benchmark for nearly 80 per cent of global crude oil trade, crossed 80 dollars a barrel on Tuesday. And some agencies like Goldman Sachs are estimating that crude oil will hit 90 dollars a barrel by the end of this year. This may have implications for India, which has a major import dependence for meeting its energy needs.

For one, the government’s fiscal maths will be tested by this oil-price rally. A further surge would put pressure on it to cut taxes on petrol and diesel which would hurt its revenue and spending.

Secondly, as the rally pushes domestic petrol and diesel prices to new highs, consumers and industry will also be hurt.