Skip to main content

Effects of Higher Crude Oil Prices on India

India is the 10th largest oil importing nation in the world (oil imports are close to 70% of its crude oil requirements). If the average price of crude oil for FY09 is $105 / bbl, then, it will result in the FY09 trade deficit coming in at US$115bn.

According to Citi,US$1/bbl increase in oil prices results in the trade deficit widening by US$700mn. Therefore, assuming a US$15/bbl increase in the Indian basket to US$120/bbl, the import bill would rise by an additional US$10.5bn, taking the CAD to US$47.3bn or 3.6% of GDP.

To be in-line with international trends, auto fuels need to rise 18% for petrol and 43% for diesel.However given political compulsions, this is unlikely to take place. As far as the fisc is concerned, to compensate the oil marketing companies for the under-recoveries, the government is likely to issue oil bonds to the tune of Rs630bn in FY09.

How much LPG, Kerosene, Diesel and Petrol Contribute to Inflation ? See Chart below.
crudeoilindia


Overall, if the above fuel prices are changed to be in-line with international prices, they will contribute 4.70% to Inflation and the Government can never do this but burn deep hole in its own pocket. Additionally, the Indian Rupee is expected to become weaker on account of higher deficits.
Tags

Comments

  1. deepikaAugust 11, 2008

    Why does the Govt. not reduce excise duty?

    ReplyDelete
  2. rajeshSeptember 17, 2008

    govt wont reduce duty because, this duty is their one of main sources of revenues for govt spendings.

    ReplyDelete

Post a Comment

Popular Posts

Your Bill Amounts Are Going To Increase From June 1, 2016

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Union Finance Minister, Arun Jaitley, in his budget announcements proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The present rate of service tax will be hiked to 15 per cent from June 1, 2016, from 14.5 per cent. Take a look at what gets expensive:



Phone Bills: Your phone bills are going to go up. So, pay a good 15 per cent now on service tax on phone bills.

Restaurant Bills :If you are dining in a restaurant that already has service tax applicable, you are going to pay more on your eating out. Though 0.5 per cent on a single bill may not mean much, frequent diners may end-up paying a lot during the year.

Travelling: You will have to pay more for air travel, as there is a service tax on tour operators and travel agents.

…
Post a Comment
Read more

Moneycontrol Terminal - Streaming Live Quotes

Moneycontrol has introduced a new feature Moneycontrol Terminal - an enhanced version of real time price updates. Though there were live quotes provided by the website previously, the present form  gives a better update of live quotes of indices and stocks.

This terminal provides live streaming quotes for both NSE and BSE free. It also provides quotes for most of the indices and also the constituents/stocks of the indices in BSE and NSE.  The terminal also provides live news and other market news, which might be useful for traders. The hardware recommended is minimum of 1 GB RAM.

It would be better if stock of any choice could be added ( market watch of a set of stocks ), which would be easier to track one's trading positions. Anyway, this is a better alternative for people who don't have access to any trading software, to view live action of the markets.




You could just try the same here at Moneycontrol Terminal


11 comments
Read more

NSE Level 3 Data

Before we get into details of NSE Level 3 Data, it is important to first understand the basic operations of the stock market.  All publicly traded equities have a bid price and an ask price when they are bought and sold. The bid is the highest price a trader( or an investor) is willing to purchase a stock. The ask is the lowest price in which he is willing to sell a stock.


Depth of the Market(DOM):Looking at a Level 1, Level 2 or Level 3 quotes can give a trader, a basic idea of how a stock is performing at any given time.

Level 1 Market Data provides the basic market data which includes Bid price, Bid size, Ask price and Ask size.

Level 2 Market Data provides more information than Level I data. Mainly, it doesn't just show the highest bid and offer, but also shows bids and offers at other prices. Now level 2 provides market depth data upto 5 best bid and ask prices.

Level 3 Market Data provides market depth data upto 20 best bid and ask prices .  This primarily used by brokers and ma…
Post a Comment
Read more