Crude rises 70% to over $110 in 90 days, now it will hit from 7 sides, know what will be the effect on you?

Crude rises 70% to over $110 in 90 days, now it will hit from 7 sides, know what will be the effect on you?

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new Delhi. The prices of crude oil suddenly jumped by more than 7 percent on Wednesday. The ongoing war between Russia-Ukraine has affected the supply of crude oil around the world, which is bearing the brunt in the form of expensive oil.

Experts say that WTI crude (WTI), which was priced at $ 65 per barrel on November 30, has risen to around $ 108. Brent crude (BRENT) has also come down from $ 70 per barrel to $110 per barrel. In this way, the prices have increased by 70 percent in just three months. From the common man to the companies and the government, they feel the heat of the raging crude. We are giving you information about 7 such major areas, where expensive crude will have the most impact.

Also read – Russia-Ukraine War: Palm Oil reaches record, edible oil will be 20% costlier, know what is the reason?

Petrol-Diesel prices

India imports about 85 percent of its oil requirement. Obviously, with the increase in the price of crude oil, petrol and diesel will also become expensive in the retail market. Under the pressure of the election and the companies under the pressure of the government, even though the companies are not making any increase for three months, but it is expected that after March 10, the prices of petrol and diesel are going to increase suddenly. Both the government and the companies are not in a position to bear the heavy burden of expensive crude.

Inflation hit the common man

The direct effect of diesel becoming expensive is visible on the cost of logistics and food items become expensive. Farmers also use expensive diesel to irrigate the field, so the market price of grains also increases. Overall, the prices of all essential things including vegetables, fruits, grains can increase.

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Crude is impacting Edible Oil

Although there is no direct relation between cooking oil and crude, but due to increase in the cost of freight, cooking oil is bound to be expensive. The second thing is that India imports 60 percent of the total requirement of edible oil and its supply is interrupted due to the Russo-Ukraine war and all edible oils including palm, sunflower, soybean are becoming expensive likewise.

depreciating rupee

The rise in the price of crude has a great impact on the Indian currency. Since, we pay in dollars to buy crude oil, so the more dollars we have to spend, the more we have to use rupees. This will increase the demand for the dollar and its price will go up. Its direct burden will fall on the exchequer of the government, because it will have to use more rupees than the dollar.

Also read – Russia-Ukraine War: Crude crosses $110, IEA warns the world

Indian Economy

Inflation coming in crude will increase the import bill of the government. It is estimated that in 2021-22, the government will have to spend $100 billion on crude imports, which will increase the current account deficit and affect the overall economy. The increase in the import bill burden on the government can also increase its revenue deficit, which is currently estimated to be 6.9 percent of GDP.

Traveling is going to be costly

Expensive crude will also have an impact on travel, whether you go by your own vehicle or use a public vehicle. Continuous use of expensive diesel can lead to increase in bus fares. Your car or bike will also consume more fuel for the same distance. Apart from this, if the price of aircraft fuel increases, then air travel will also become expensive.

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Difficult to maintain growth rate

The impact of the impact on the economy from all sides will also be seen on the growth rate. Expensive crude will burden the government with revenue and inflation-stricken people will be forced to reduce their expenditure. In such a situation, it will be difficult to maintain the current pace of GDP growth rate of 5.4 percent. That is, we will fall behind the growth rate of China and it will be too late to become a 5 trillion dollar economy.

Tags: Crude oil, Crude oil prices

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