OIL IN INDIA

OIL ON THE BOIL

Indian Express, February 5, 2011

The political unrest in the middle east, high demand from the US and China have once again pushed up the price crude to over $100 a barrel for the first time in over two years, raising concerns among policymakers on the widespread fiscal and inflation risks.

The upward pressure on crude is expected to persist this year and the International Monetary Fund baseline projection for oil in 2011 is $90 a barrel, up from $79 per barrel last year. Since India imports about 80% of its crude requirements and with domestic production remaining stagnant over the years, a Deutsche Bank estimate suggests that higher oil prices in 2011 could pose a risk, increasing the fiscal deficit by 0.5% of GDP in the 2011-12 budget. The research note, however, says authorities are unlikely to absorb the entire additional cost, preferring to push some of the spending to the next fiscal year and some off-budget.

(...) [artículo aquí]