As seen from the chart, global crude price has risen over four times in the last 12 years, and India’s crude import bill
has surged more than ten-fold. However, absolute consumption of crude has grown only 131% during the same period. Also, it is interesting to note that the rupee has remained in a band of 40-50 to the dollar (based on the average rupee value for the fiscal) over the last 12 years. Experts have been calling for a steep hike in fuel prices so as to deter consumption and lower our import bill and thereby ease pressure on the rupee. But as the chart shows, a sharp jump in consumption is not what has driven up the crude import bill; rather it has to do with the spike in global crude prices. For India to get a handle on its import bill, crude prices have to correct sharply. (curtsey : money control)
Rupesh Yatesh Dalal
Head Research Department
Head Research Department
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