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Here's Why Crude Oil Was Modi's Best Friend So Far
May 21, 2018


Look at this chart...

It shows India's total import bill of crude oil and petroleum products on an annual basis. I've marked India's oil import bill during the Manmohan Singh regime and the Narendra Modi regime.

What pattern do you notice?

Clearly, the Modi government has been a big beneficiary of lower crude oil prices.

During the UPA II regime, India's average annual oil import bill was US$ 133 billion. In fact, in the last three years of Manmohan Singh's leadership, the oil import bill exceeded US$ 150 billion. Compare that with an average annual oil bill of US$ 95 billion during the four years of Modi's leadership.

The actual savings would have been even higher, because I believe the consumption of crude oil and petroleum products would have been quite higher in the Modi era than the Manmohan era.

Last Thursday, Brent crude oil prices shot above US$ 80 a barrel.

This is the highest level since 2014. In the past one year alone, oil prices have surged more than 50%.

Now, what if oil prices go back to the levels during the Manmohan Singh regime? What would happen to India's current account and fiscal deficit? What would happen to inflation and RBI's stance on interest rates?

With the next general elections just a year away, rising crude oil prices are going to be a big worry for the Modi government.

It should worry you too...

Data Source: Petroleum Planning and Analysis Cell
*FY17 numbers are projections

This Chart Of The Day was published in The 5 Minute WrapUp - Alert: Narendra Modi's Best Friend Is Stabbing His Back Right Now

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