Oil subsidy bill can be slashed by half in next fiscal
The oil subsidy bill could be slashed by half in the next fiscal from Rs 40,915 crore if crude remains within $45-55 per barrel.
Sources said North Block is considering many factors in its subsidy calculations, including the crude price.
The petroleum ministry is considering to limit the subsidy to BPL families by excluding those with an annual taxable income of over Rs 7 lakh per annum.
However, the signs of a pick-up in global growth and an increase in oil demand could lead to a price flare-up and upset the subsidy calculations.
US Energy Information Administration (EIA) expects Brent prices to average $49 per barrel in 2021 up from an expected average of $43 in the fourth quarter of 2020. Goldman Sachs in its bullish forecasts says it could touch $65 per barrel in 2021.
