Bonjour, new guests from small-town India
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
File photo - Reuters
The oil market is in a tailspin. Brent crude prices have cracked to $35/barrel today, down 23 per cent from Friday’s close, following Saudi Arabia starting a price war with Russia by dropping its selling prices sharply.
Goldman Sachs is now predicting the price to fall to $20/barrel if the war between OPEC members exacerbates and it fails to reach a deal on production cuts.
According to a Reuters report, Saudi Arabia is preparing to increase its production above the 10-million barrels per day mark; the current production is 9.7 million barrels per day and there is capacity to ramp it up to 12.5 million barrels per day.
Oil prices have been falling following the slump in demand due to the shutdown in China post the coronavirus outbreak.
The drop in oil prices, however, comes as good news for India that has been struggling to manage its current account deficit.
The cost of the Indian basket of crude, which averaged $71/barrel in April last year, dropped to $59.7/barrel in October and further to $51.03/barrel last week. The current drop in prices, if factored in, will see costs coming down further.
India’s crude oil imports have been rising by the year, adding to the government’s already stressed fiscal position.
In 2018-19, the country imported 226.498 million tonnes of crude oil. Assuming the same quantity of imports for 2020-21, at $50/barrel, the import bill would be $83 billion — lower than the $111.9-billion in 2018-19 and the estimated $105 billion for 2019-20. At the current price of $35/barrel, the import bill will be $58 billion, leading to a whopping $47-billion saving for the government compared to 2019-20.
Now, that’s a tidy sum for the government to make good its deficit in the current account.
Even if the current level of $35/barrel does not sustain, and it settles at $40-45/barrel, that will be good news. It will reduce prices at the fuel pump for consumers. The Reserve Bank of India may be seen willing to cut rates as inflation may slide.
The drop in crude prices will help cool down the rising consumer price inflation. In January, the CPI was at 7.52 per cent (YoY), the highest since May 2014, according to data released by the Ministry of Statistics and Programme Implementation.
Fuel inflation in January was 3.58 per cent, up from 0.63 per cent in December. Now, with crude prices dropping sharply, it will lower the overall inflation, bringing respite to consumers.
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
Citroen’s first vehicle sports a novel design and European interiors. It is also meant to be as comfortable as ...
The pandemic is only the tip of the iceberg that the country’s cash-poor airlines — both regional and national ...
The government is yet to specify the framework of its recently announced old vehicle scrappage policy
This Women’s Day, we discuss the features of a few financial products that aim to help you save, get insured ...
Sensex, Nifty 50 make a strong bounce-back, but test resistances
Avenue Supermarts (₹3,286.1): Makes fresh all-time highIn October last year, the stock of Avenue Supermarts ...
The exchange-traded fund ticks all boxes as an efficient tool to track gold prices
Muriel has put our names down on a list to get the Covid-19 vaccination because — hurrah! — the age limit has ...
They are the health warriors who battled the Covid-19 pandemic on the ground, and are now the face of the ...
Uzbekistan’s grandest city dazzles tourists with its history, architecture and food
It’s the birth anniversary of Michelangelo di Lodovico Buonarroti Simoni, one of the great artists and ...
Comfort, convenience, value, safety — and not necessarily the colour pink — but do brands deliver?
Why and how marketers have used camels, and left us thirsting for more
Start-up SALT wants to break feminine stereotypes around money, and is asking women to reassert agency
It’s that time of year again when brands suddenly start paying obeisance to women power. From sentimental to ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor