‘In­dia is Com­fort­able with Oil up to $65/bbl’

Bud­get as­sumed oil at $65 in ex­pen­di­ture as­sump­tions, says fi­nance sec­re­tary

The Economic Times - - Companies & Economy -

New Delhi: With the surge in oil prices threat­en­ing to up­set its fis­cal maths, Fi­nance Sec­re­tary Ashok Lavasa has said In­dia is com­fort­able with oil prices of up to $65 per bar­rel which would be a man­age­able range for an im­port­ing na­tion.

The Bud­get for 2017-18 has as­sumed an oil price of $65 per bar­rel in mak­ing its ex­pen­di­ture as­sump­tions in­clud­ing sub­sidy payout, he told PTI.

“$65 (per bar­rel) is what we feel is what we should be able to man­age with the cur­rent al­lo­ca­tion (made in the Bud­get),” he said.

The in­ter­na­tional crude oil price of In­dian bas­ket cur­rently stands at $54.23 per bar­rel.

The slump in oil price in 2014 and 2015 was one of the fac­tors that helped In­dian econ­omy notch up big gains by cut­ting its im­port bill and rein­ing in in­fla­tion. In­dia, which de­pends on im­ports to meet 80% of its oil needs, will have to spend .₹ 9,126 crore ($1.36 bil­lion) more ev­ery year for one dol­lar/bar­rel in­crease in crude oil. Be­sides, the ris­ing crude oil tra­jec­tory im­pacts in­fla­tion and growth.

“The gen­eral view of the ex- perts is the oil price will re­main within a man­age­able range and it was also felt that in case there was a spurt beyond a cer­tain level say beyond $65-70 then Shale gas in­dus­try will come into the mar­ket and that will have a sober­ing ef­fect.

“So we feel that in the fore­see­able fu­ture it will re­main within the man­age­able limit and we should be able to deal with that in the al­lo­ca­tion that we have made,” he said. Asked if the gov­ern­ment can man­age the sit­u­a­tion if the oil goes up to $65 with­out cut­ting ex­cise duty, he said, “That is a call which has to be taken when the sit­u­a­tion arises.”

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.