India's crude basket has been rising steadily, sparked by an equity and commodity rally across the globe.
The international crude oil price for Indian Basket as computed by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas increased to 104.87 US$ /barrel (bbl) on 03.8.2012.The price was higher than US$ 103.74 /bbl on the previous trading day of 02.8.2012.
In rupee terms also, the crude oil price increased to Rs 5881.11 per bbl on 03.08.2012 from Rs 5786.62 per bbl on 02.08.2012.
Rising crude is a worry for India, which imports as much as 70% of its fuel requirements. The country's large fiscal deficit can be attributed to fuel, which is largely subsidised by the government.
Apart from petrol, which is deregulated, the government subsidises LPG, diesel and Kerosene. With a risk on rally back in commodities, there is a possibility that crude could rally further.