The sharp economic recovery and rising demand post the second wave of Covid coupled with a spike in global oil prices may pose a challenge for the Government in FY22 to maintain fiscal discipline amid good growth in tax revenue.
The country’s crude oil import bill that fell drastically last year in the absence of demand and soft oil prices, has risen by over 138 per cent in April-August of FY22 to $ 42 billion, up from close to $ 18 billion the same period of last year.
During the period, crude has jumped by about 40 per cent from $60 a barrel to more than $85 a barrel now. This price pressure has come when demand for petroleum products is on a rise in the country already reaching pre-Covid levels and rising.
All this has meant that India is not only importing more to meet additional demand, but is doing it at premium prices ballooning its import bill.
