Oil above $75 a barrel raises concerns over macroeconomic indicators

Oil imports rose 40% in rupee terms in FY19

The price of Brent crude saw a 40 per cent fall in Q3 FY19, followed by a 50 per cent rise in the subsequent quarter. 

In the first month of FY20, crude oil crossed $75/bbl, raising concerns about the import bill, fear of rise in retail prices, and putting the two deficits, current account deficit and fiscal deficit, at a potential risk. 

Chart 1 shows that oil price has been gradually rising since January 2019. However, what can be linked to the general elections, the retail prices are not rising that fast, as Chart 2 reveals. Petrol still costs Rs