According to Hardeep Singh Puri, minister for petroleum, natural gas, and urban development, the current decline in crude oil prices is the result of recessionary anxieties, and prices may drop much more if western economies continue to experience difficult conditions.
He continued by saying that the world economies could not support petroleum prices above $120 per barrel since the ensuing inflation often leads to a downturn.
On Wednesday, Brent futures dropped under $100 a barrel for the first time since April 25 due to concerns about a possible global recession. On Thursday at 6 p.m. (IST), it was selling at about $101.53 per barrel.
India, which imports around 85% of what it requires annually, would have reduced import costs if oil prices were to decline. Given that the cost of several important commodities, including natural gas and subsidised items like fertilisers, are correlated with oil prices, it would also relieve pressure on the nation's current account deficit and have a positive impact on the fisc.
According to Saurav Mitra, director of energy at Crisil, the decline in the price of Brent would have a substantial effect on India and other countries that import oil, including a lessening of the overall inflationary pressure on these economies.
The Indian basket of crude oil decreased to $103.71 per barrel on July 6 from its decade-high of $121.28 per barrel on June 10. The Indian crude oil basket is a derivative basket made up of sweet and sour crude oils refined at Indian refineries.
The Indian crude oil basket's average daily price was $102.97 in April; it increased to $109.51 in May and to $116.01 in June. The average price for the month of July is $109.44 per barrel.
You can't have a conversation on gas pricing in isolation, the minister stated in reference to the most recent increase in the cost of Liquefied petroleum gas (LPG) for cooking. You must talk about it with other energy items. The minister said that although India is one of those nations without access to gasoline, gas and fuel costs have been kept at comparatively modest levels.
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