If the situation endures, the impact could be serious in view of the fact that oil imports have been growing at a sharp rate in the current year as also the fact that India has to discharge a hefty debt service payment of $14.5 billion. While this could upset the balance of payments calculations for 1996-97, it will also have an impact on the oil pool deficit.
The government itself was not prepared to react, with the petroleum ministry claiming that they were still evaluating the situation. On the contrary, finance ministry officials were more optimistic and maintained that the impact would be marginal.
According to the finance ministry officials, the current stalemate would not continue. Secondly, imports in the current year have declerated faster than exports, implying a more favourable outlook on the trade front. But they conceded that the expected downswing in brent crude prices in the latter half of the year may not arise.
Reacting to the sharp surge in oil imports in the current year, officials maintained that there was a seasonality in the import pattern. In other words, Indian Oil Corp and Oil India Ltd
