Wavering Oil Prices In INDIA, Good Or Bad?

Oil Marketing Companies (OMC’S) in India have started a mechanism of aligning the fuel
prices (petrol and diesel) with respect to the international crude oil prices on a daily basis,
hence we need to check the prices daily before refueling our vehicles. This isn’t the only
reason leading to such fluctuations in oil prices, as we all know fuel is what drives the
economy hence it is governed by many political, geological and socio-economic factors.
The recent events which induced an all time crude price drop in whole wide world are- the
expansion in the unconventional supplies like the US oil shales which is being produced at an
all time high rate of 9.37million barrels per day drove the OPEC (Organization of Petroleum
Exporting Countries) to shift their policies and reduce their prices due to sudden market
overpower. Also, rising demand of the crude in Asia-Pacific region contributed to the cause.
All these events influenced the Indian oil market marginally.
Most importantly the demonetization which depreciated the rupee’s value, the new GST
implication which lead to an increase in the excise duty maneuvered the ups and down in the
ongoing oil prices.
However, variation in oil prices are inevitable and are beyond the expectation of producers,
consumers and analysts. If the price decline is sustained, it supports growth, reduces inflation and fiscal pressure in the oil importing countries like India, China.
If there is a sharp fall in prices, it weakens the export, trade balance and leads to the fiscal
deficit of oil exporting countries.