New Delhi: India’s crude oil import bill may witness a sharp surge as the price of crude oil has touched an all-time high in the international market. Brent crude oil futures reached at $130.89 per barrel early on Monday. This is the highest price in the last 14 years.
Crude oil price is sharply rising over the fear of US and European ban on Russian oil imports. Russia is the second largest crude exporter in the world after Saudi Arabia and it exports 4 million to 5 million barrels of oil daily. As per market experts, crude prices posted their highest weekly gains since the middle of 2020. Brent prices gained 21% and WTI posted 26% gains.
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India imports more than two-thirds of its oil needs and thus the rising crude oil prices will increase the trade deficit of the country and boost inflation. The rise in crude oil prices will also increase the current account deficit of the country, which sits at $9.6 billion, about 1.3% of the GDP.
According to India Ratings and Research, the increase in crude oil prices will translate into a $ 6.6 billion increase in trade/current account deficit of the country. Earlier Global Forecasting Agency Oxford Economics has warned that high oil prices and inflation will weigh India’s growth outlook.
Oil companies hiked the price of fuels in the country in November 4, 2021. It is expected that the oil companies will hike the price of petrol and diesel this week.
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