The petrol prices have reached 4-year high levels in some of the metro cities in Indiaa while diesel has surged to record highs and the trend is likely to continue. This is due to the fact that commodities including oil shall see an increase in price by 20% well in line with the increased demand as well as restrains by the producers.
As per the World Bank release, the consumption of oil world over is likely to grow at 1.6%. Also, the prices in the ongoing year are expected to average at around 65$ per barrel as against $53 per barrel in the year gone by.
Also the heavy price rise expected for commodities like oil is expected to impact India negatively as the country is heavily dependent on imports for its energy commodities.
Chief Economist Shantayanan Devarajan is quoted as saying in a PTI report, "Accelerating global growth and rising demand are important factors behind broad-based price increases for most commodities and the forecast of higher commodities prices ahead". "At the same time, policy actions currently under discussion add uncertainty to the outlook," he added.
In its forecast for the year 2019, the oil prices are expected to average at around $65. It is expected that oil prices shall go down from April 2018 but will get support from restraint by OPEC producers and strong demand.
At the same time, price pressures on the auto-fuel are not being checked by possible government measures such as reduction of excise duty etc. Instead it expects to cut down on sales or VAT on petrol and diesel.
With PTI Inputs