Scraping the barrel on oil

There is arguably no bigger immediate problem facing the Indian economy than oil. Since August, the rupee has fallen from an average of Rs 45.3-to-the-dollar to the current Rs 52-53 levels. This, even as the same period has seen the average price of crude paid by Indian refiners only going up from below $ 107 to above $ 110 per barrel, translating into an effective rupee increase of 20 per cent or so. Moreover, unlike in 2008 – when global crude prices plunged from their $ 133/barrel average highs in July to below $ 42 by December – the recurrence of a worldwide economic slowdown this time has not provided any respite on the oil front.

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