Because of the steep rise in the International Oil Prices during the COVID-19 crisis and the emergency dead lock measures taken by the Government of India resulted devastating impact not only on the PSUs but also on the Indian Economy which lead to serious repercussions on the oil prices ,various goods and services. This resulted in contraction of GDP by -21% during the first and second quarters (April-June) & (July-Sept) 2020.
Though the Government of India supported by releasing the fiscal stimulus package to support the MSMEs but the graded unlock created a robust demand and supported the fiscal deficit towards a positive growth towards the -7% by the end of November 2020.
The Public Debt of India increased drastically because of loans taken from then Asian Development Bank, IMF, World Bank to support the fiscal package which led to Inflation at a rate of 6.2% amid the COVID pandemic. Ban on Chinese goods , imposing a high tariffs and excise duty on the imports and exporting the goods led to capital inflow so that the Foreign reserves increased drastically in the Central Bank which led to the current account surplus for the first time since 2016.
Disruption in the supply chain and steep rise in unempolyment, CPI ,WPI led to serious repercussions on Economy but capital inflows by active participation of FPI/FIIs and DIIs in the financial markets created a robust demand for the investment in various projects and this is boosted by the new banking reforms and regulations proposed by the federal bank in the month of september 2020 which stated "support to the MSMEs especially by creating a gross root level demand in the REALTY sector to lend money to the Corporates and granting the home loans made easy" so that this in turn forms a chain of demand in the dependant sectors like boosting the employment and healing the retailers to enhance their business efficiently.
Oil Price fluctuations
What is the Average price of Barrel of Crude oil (yearly average) which is imported by the Government of India from (2015-2021 at present)?
IndianOil imports crude oil for meeting requirement of its own and subsidiary refineries with prices linked to benchmark crude oils prices. The FOB prices for the benchmark crude oil grades arepublished by S&P Global Platts, which is widely accepted by Oil Industry. The Financial year wise FOB prices of the benchmark crude oil grades in United States Dollar/Barrel (USD/bbl) from 2015-2021are tabulated as under:
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MS(Motor Spirit) and HSD (High Speed Diesel) are deregulated products. Central Excise Duty is levied by the Central Government on manufacturing of Petrol and Diesel , paid at the time of clearance from the manufacturing units as per the provisions of Central Excise Act, 1944.
The Rate of Central Excise Duty on Petrol and Diesel (Without Brand Name) as on 01.04.2016 and subsequent changes are given below
Hike in the Oil prices because of Pandemic and Global Demand pick up for Crude Oil, which has become a Burden on the Middle and Low socio-economic class.
Breech in the price of Petrol which crossed 💯 in almost all the states except Madhya Pradesh, Rajasthan, Orissa impacting low socioeconomic people as they couldn't afford to FMCG for their daily needs because of Inflation (Low supply of goods and pick up demand Globally)
Conclusion: Upgrading the motor vehicle with batteries can reduce environmental pollution, reduces the expenditure on oil imports, so that Government of India can spend in infrastructure, health and various services and schemes, which helps in creating Long term Assets . It also generates employment and boosts the Economy.