The government has ruled out an immediate cut in taxes on petrol and diesel to soften the impact of the geo-political tensions, which have triggered a spike in global crude oil prices.<\/p>\n
Brent prices crossed the $71-a-barrel mark early Wednesday morning after Iran launched a missile attack, but softened later in the day. Since last year, Brent prices have jumped nearly 15% and were trading around $68 a barrel.<\/p>\n
Over the past year, the increase in pump prices of diesel and petrol has been around 10%. “There is no need to panic,” said a high-ranking government source, adding that prices had softened a little after a spike due to Qassem Suleimani’s killing last week but rose again after Iran fired missiles at American bases in Iraq on Wednesday.<\/p>\n
Petroleum minister Dharmendra Pradhan told reporters that the government is keeping a close watch on the developing geo-political situation, while also preparing itself to face any eventuality arising out of the crisis. Pradhan has had detailed discussions with external affairs minister S Jaishankar, who has spoken to his counterparts in oil-producing countries stating India’s concerns.<\/p>\n
A sharp rise in oil prices has the potential to adversely impact the Indian economy with inflation facing the first round of impact. An increase of $10 a barrel in crude prices affects inflation by a 0.1 percentage point. With India importing 80% of its crude requirement, the rupee also comes under pressure due to a higher import bill. This, in turn, affects the trade balance and current account deficit.<\/p>\n
During 2018-19, India’s oil import bill was estimated at $140 billion. Both retail and wholesale inflation have shown a rising trend on the back of high food prices and any increase in oil prices could stoke inflation at a time when growth is estimated at an 11-year low of 5%.<\/p>\n
Besides, a reduction in duties will impact the already strained government finances, especially when net tax revenue has gone up by 2.6% against a budgeted 11% increase (after transfer to states).<\/p>\n","protected":false},"excerpt":{"rendered":"
The government has ruled out an immediate cut in taxes on petrol and diesel to soften the impact of the geo-political tensions, which have triggered a spike in global crude oil prices. Brent prices crossed the $71-a-barrel mark early Wednesday morning after Iran launched a missile attack, but softened later in the day. Since last year, Brent prices have jumped nearly 15% and were trading around $68 a barrel. Over the past year, the increase in pump prices of diesel and petrol has been around 10%. “There is no need to panic,” said a high-ranking government source, adding that prices […]<\/p>\n","protected":false},"author":40,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-309771","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/309771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=309771"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/309771\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=309771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=309771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=309771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}