3 weeks ago
Economist Warns $100 Oil Could Hit India’s Economy
Oil prices can affect how much people pay for fuel and other goods.
An economist said India has protected people by keeping retail fuel prices from rising as much as global prices.
India’s inflation was about 2.5% in January and is now around 5%.
The increase happened over seven months.
Without fuel-price protections, inflation might have reached 9% or 10%.
The economist thinks inflation could stay below 6% this year if the protections continue.
However, oil prices above $100 could become a bigger problem next year.
The article says uncertainty about oil prices is expected to continue.
India’s inflation rose from about 2.5% in January to roughly 5% over seven months.
An economist said fuel-price protections have shielded citizens from larger inflationary pressure.
Without that cushioning, inflation could have reached approximately 9% or 10%, according to the economist.
If fuel-price cushioning continues, inflation may remain below 6% through the year.
Crude prices staying above $100 next year could create a larger economic problem for India.
- Who
- India and an economist commenting on the country’s inflation and fuel-price policies.
- What
- The economist warned that crude oil prices above $100 could have a real economic impact on India.
- Where
- India.
- When
- Inflation rose over seven months from January; the article also discusses risks for next year.
- Why
- Fuel-price protections have cushioned consumers from global oil costs, but sustained crude prices above $100 could increase inflationary pressure.
Key facts
- Inflation in January
- About 2.5%
- Current inflation cited
- About 5%
- Time period
- Seven months
- Potential inflation without fuel cushioning
- About 9% to 10%
- Possible inflation ceiling this year
- Below 6%, if cushioning continues
- Oil-price risk
- Crude prices remaining above $100 next year
- Policy effect
- Retail fuel-price protections have reduced the immediate impact on consumers
Sources
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