×

UPSC Courses

DNA banner

DAILY NEWS ANALYSIS

  • 09 January, 2020

  • 3 Min Read

Rising oil prices may hit Budget math

Syllabus subtopic: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.

Prelims and Mains focus: about the geopolitical tensions between U.S. and Iran and its impact on India’s economy

News: The prices of crude oil constituting the Indian basket has been increasing since October and is likely to exceed $70 a barrel this month on escalating U.S.­ Iran tensions.

Background

  • Major General Qassem Soleimani, the Iranian Revolutionary Guards commander, was recently killed in a US strike at Baghdad International Airport. He was the long-serving head of Iran’s Quds (“Jerusalem”) Force and has been seen as a deadly adversary by America and its allies.

  • Rising oil prices had already led to an increase in the prices of petrol and diesel by about 54 paise a litre and 83 paise a litre respectively since January 1, 2020. The Indian basket of crude oil was pegged at $59.70 per barrel in October 2019, rising to $62.54 per barrel in November and to $65.52 in December. It is currently hovering around $70 per barrel.

What is the reason behind this increase in oil prices?

  • The price of benchmark Brent oil went up to $71.75 per barrel after Iran retaliated against the U.S. by attacking the latter’s bases in Iraq, but softened to $67.50 a barrel after Iran said that it did not want to further escalate the tensions.

Impact on India’s economy

  • Higher crude oil prices is ‘bad news’ for the Indian economy that imports over 85% of its crude oil requirements.

  • Higher crude oil prices will be bad for Inida’s current account deficit and it will further tighten our fiscal situation.

  • Further, divestment of oil PSUs will become difficult due to higher crude oil prices.

  • Rising crude oil prices could impact corporate earnings of several sectors, including auto and oil marketing companies, according to analysts.

Source: The Hindu


Soil Mapping

Soil Mapping In order to use fertilisers more effectively, the Food and Agriculture Organization (FAO) recently launched a project to digitally map soil nutrients in sub-Saharan Africa (SSA) and central America. Additionally, it will arrange and enhance current soil maps. About soil mapping Soil Mapping is the process of delineating na

New START Treaty

New START Treaty Recently, due to western sanctions, Russia halted inspections under the new START treaty. About New START Treaty The New START treaty, signed in 2010 by President Barack Obama and Russian President Dmitry Medvedev, limits each country to no more than 1,550 deployed nuclear warheads and 700 deployed missiles and bombers,

Palestine - Israel Ceasefire

Palestine - Israel Ceasefire Recently, there was a ceasefire between Israel and Palestine following three days of fighting that claimed the lives of hundreds of people in both nations. Tensions between Palestinians and Israeli police erupted at Jerusalem's al-Aqsa Mosque earlier this year as well. Recent conflict Since Israe

India’s Tourism Market

India’s Tourism Market In 2024, India's outbound tourism will exceed USD 42 billion, according to a report recently published under the title "Outbound Travel and Tourism - An Opportunity Untapped.", released by Nangia Andersen LLP in association with FICCI. Traveling "outside" of one's native country for tou

Food Processing Sector

Food Processing Sector The government's recent efforts to help the food processing sector were recently detailed in a written response to the Rajya Sabha Minister of State (Food Processing Industries). Present status of the food sector in India A type of manufacturing called food processing uses science and technology to transform

Toppers

Search By Date

Newsletter Subscription
SMS Alerts