As per an analyst at France based multinational bank Societe Generale , the
brent crude price is likely to touch US$ 125 per barrel in case US
unleashes military attack on Syria. This further comes with odds of
crude going as high as US$ 150 per barrel in case other Middle East
economies get involved. Interestingly, when it comes to oil, the
negative speculations are as impactful as the event itself. That other
OPEC member like Saudi Arabia could ease supplies if needed does not
seem to be helping the oil prices. Already the Brent crude futures for
October have hit six month high.
All this doesn't bode well for India. Rising crude prices along with falling rupee is likely to inflate the fuel subsidy bill. That too at a time when the Indian economy stands vulnerable and can't afford further burden on the fiscal front. The Government had announced diesel price reforms some time back that lent some hope to the bleeding oil and gas sector. However, all optimism has been watered down in the face of ongoing events. The recent reforms are rushed and an outcome of desperation. They are too little and too late to salvage the sector or the economy. Things might have been better if the Government had taken timely steps to make India more energy self sufficient.
All this doesn't bode well for India. Rising crude prices along with falling rupee is likely to inflate the fuel subsidy bill. That too at a time when the Indian economy stands vulnerable and can't afford further burden on the fiscal front. The Government had announced diesel price reforms some time back that lent some hope to the bleeding oil and gas sector. However, all optimism has been watered down in the face of ongoing events. The recent reforms are rushed and an outcome of desperation. They are too little and too late to salvage the sector or the economy. Things might have been better if the Government had taken timely steps to make India more energy self sufficient.
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