Crude favour for Narendra Modi govt: 5 top points

Mon Jul 21 2014, 14:10 hrs
Even as the Narendra Modi government has set the fiscal deficit target at 4.1% of GDP, the one factor working in its favour is softening of global crude prices. (Image source: Thinkstock)
Even as the Narendra Modi government has set the fiscal deficit target at 4.1% of GDP, the one factor working in its favour is softening of global crude prices. (Image source: Thinkstock)
On June 19, the Brent crude price had hit a high of $115.2 per barrel, and the Indian basket touched $111.94 on that day. Since then, Brent price has softened by nearly 7.5% and the Indian basket recorded a fall of $104.22 per barrel on July 15. (Image source: Thinkstock)
On June 19, the Brent crude price had hit a high of $115.2 per barrel, and the Indian basket touched $111.94 on that day. Since then, Brent price has softened by nearly 7.5% and the Indian basket recorded a fall of $104.22 per barrel on July 15. (Image source: Thinkstock)
Crude prices have a bearing on the diesel subsidy and the finances of state-owned oil marketing companies (OMC). (Image source: Thinkstock)
Crude prices have a bearing on the diesel subsidy and the finances of state-owned oil marketing companies (OMC). (Image source: Thinkstock)
Loss on diesel sales drops: While the under-recovery for diesel for the fortnight beginning June 16 stood at Rs 1.62 per litre, it more-than-doubled to Rs 3.4 per litre in the fortnight commencing July 1 following the Iraq crisis. It has dropped to Rs 2.49 per litre. (Image source: Thinkstock)
Loss on diesel sales drops: While the under-recovery for diesel for the fortnight beginning June 16 stood at Rs 1.62 per litre, it more-than-doubled to Rs 3.4 per litre in the fortnight commencing July 1 following the Iraq crisis. It has dropped to Rs 2.49 per litre. (Image source: Thinkstock)
Lesser stress on OMC Finances: The combined daily under-recovery for OMCs on the sale of diesel, PDS kerosene and domestic LPG, which rose to Rs 271 crore for the fortnight beginning July 1, has now dropped to Rs 249 crore. Total under-recoveries for FY15 are projected at Rs 91,665 crore. (Image source: Thinkstock)
Lesser stress on OMC Finances: The combined daily under-recovery for OMCs on the sale of diesel, PDS kerosene and domestic LPG, which rose to Rs 271 crore for the fortnight beginning July 1, has now dropped to Rs 249 crore. Total under-recoveries for FY15 are projected at Rs 91,665 crore. (Image source: Thinkstock)
Impact on Subsidy bill: Petroleum subsidy has risen by 472% to Rs 85,480 crore from FY10 to FY14. The share of petroleum subsidy in the total subsidy has also risen from 10.6% to 33.5% in the last four years. Softening of crude oil prices will also help control inflation. (Image source: Thinkstock)
Impact on Subsidy bill: Petroleum subsidy has risen by 472% to Rs 85,480 crore from FY10 to FY14. The share of petroleum subsidy in the total subsidy has also risen from 10.6% to 33.5% in the last four years. Softening of crude oil prices will also help control inflation. (Image source: Thinkstock)
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