NEW DELHI(Commodity Online): The falling crude oil prices doesn?t benefit India as the international prices and rupee exchange rate are moving in the opposite direction, reveals the study by The Associated Chamber of Commerce and Industry of India.ASSOCHAM called for drastic measures to deregulate the oil sector completely.
According to the study, here have been instances when the international price of crude oil and exchange rate have been moving in different directions. Yet, oil import bill in rupee terms largely shows an increasing pattern.
It has been pointed out that the increase in crude oil imports accounts for 40% of country?s export earnings, which is increasing further.
Rajkumar Dhoot, President of ASSOCHAM said, ?A large percentage of India?s exports might actually be used to finance the import of single commodity i.e. crude oil. The data shows that the petroleum imports have been equivalent to almost 40 per cent of the total exports made by India in the past six years. For the year 2011-12, the figure is an astonishing high of 51.2 per cent.?
He adds,?possible indicates that the benefits of lower international prices were either offset by a faster depreciating rupee or a slower appreciating rupee could not offset the negative effect of a sharper rise in international crude oil prices thereby resulting in a higher import bill.?
Moreover, since both the international prices and exchange rate are difficult to regulate the only policy option left is to curb the demand. He also mentioned that it was time the country showed austerity in oil consumption. ?This will address a plethora of problems such as rising trade deficit, a bulging fuel subsidy bill and other macro imbalances?.
The study says that the quantity of crude oil import over eight-nine years has also recorded a 99.5 per cent growth thus exerting pressure on the country?s current account deficit, which shot up from USD 4.16 billion in quarter one of 2009-10 to USD 19.62 billion in quarter three of 2011-12.
The crude oil imports have shot up in quantitative terms from 81.98 million tonnes in 2002-03 to to 164 million tones in 2010-11.
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