He says no disruption in India's long-term crude oil supply seen
In the wake of crisis in Iraq, Finance Secretary Arvind Mayaram has urged the markets to remain calm.
“We are hopeful that Iraq crisis will blow over. The markets must remain calm and there is no reason to panic,” Mayaram told reporters on the sidelines of a conference on Commodity Market here on Saturday.
This remark has come a day after the BSE Sensex shed 348 points and the NSE Nifty lost 107 points. Brent crude climbed to a nine-month high of nearly $115 a barrel, while the rupee slipped 52 paise to a four-week low of 59.77 against the US dollar.
Crude oil supply
About oil supply, he said that India’s long-term oil supply is fairly established. “I don’t see any disruption in that. We need to remain calm and the Government is fully watchful of situation,” he said. Iraq is the second largest supplier of crude oil to India with over 25 million tonnes annually.
With spike in crude oil prices and weakness of rupee, there is apprehension that the crude import bill will go up as over 3/4th of the total oil requirement is met through import. There are also risks of trade deficit widening and inflation surging.
However, Mayaram said that the inflation is trending down. “I am very confident that with the measures Government is now taking and the growth impulses that we are seeing in the economy, inflation must come down further,” he said.
It may be noted that the retail inflation for the month of May came down to 8.28 per cent, while wholesale inflation for April stood at 5.2 per cent.