Rising oil prices that have shot up over 21 per cent in the past one month to hit $105 a barrel recently in the backdrop of the ongoing Russia – Ukraine geopolitical conflict spell trouble for the Indian government and can upset its fiscal math.
According to a report by the economic wing of State Bank of India (SBI), rising crude oil prices can burn a hole as big as Rs 1 trillion in government’s coffers in fiscal 2022-23 (FY23). Despite the rise in oil prices, the Indian government has kept a lid on the retail selling prices of auto fuels – petrol and diesel – unchanged since November 2021 as a populist measure given the impending assembly elections across five states.
