{"id":"f-86c21c4f86-9ca35f01-572d-5fcc-93e5-61d61330097d","title":"$100 crude could cost Centre ₹30,000 crore every month as Middle East crisis threatens India’s finances: Report","description":"Elara Securities warns that sustained oil prices above $100 per barrel could widen India’s current account deficit, weaken the rupee, and push additional fiscal costs to ₹3.6 lakh crore annually.","timestamp":1773320453,"category":"national_v_two","headline":"$100 crude could cost Centre ₹30,000 crore every month as Middle East crisis threatens India’s finances: Report","modifiedHeadline":"$100 crude oil: ₹30k crore monthly hit for India","subCategories":["scid_b6669955"],"subcategoriesName":["National"],"region":"IN","bundleMetaData":{"bundleId":"7b48871c-c993-4956-b43d-6f46f8e1b036","bundleTitle":"Today In India","cardData":null},"iabCategoryId":"81","iabCategoryName":"Commodities","fcSummary":"rising crude oil prices, potentially averaging $100/barrel, could significantly burden india's finances. the report estimates an additional ₹3.6 lakh crore annual expenditure due to subsidies and oem support, potentially widening the current account deficit and weakening the rupee. geopolitical tensions and supply disruptions pose major risks.","summary":"Oil prices surge to $100/barrel, straining India’s finances. Report: $100/barrel oil could add ₹3.6 lakh crore annually.","ctaUrl":"https://trends.glance.com/newz/news/IN/en/firstpost/f-86c21c4f86-9ca35f01-572d-5fcc-93e5-61d61330097d","sourceUrl":"https://www.firstpost.com/business/100-crude-could-cost-centre-30000-crore-every-month-as-middle-east-crisis-threatens-indias-finances-report-13988828.html","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/IFglU9f4lWO0.webp","content":"A sustained surge in global crude oil prices to around $100 per barrel could significantly strain India’s government finances, with each month of elevated oil prices adding nearly ₹30,000 crore to the Centre’s fiscal burden, according to a report by Elara Securities.\n\n
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\n The report warned that if Brent crude averages around $100 per barrel through fiscal 2027, the Central government’s additional annual expenditure could rise to nearly ₹3.6 lakh crore, largely due to fuel subsidies and support extended to oil marketing companies (OMCs).\n
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\n The assessment comes amid escalating geopolitical tensions in the Middle East, which have heightened concerns about energy supply disruptions and global supply chain instability.\n
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\n According to the report, a prolonged crisis in the region could have broader macroeconomic consequences for India. In a scenario where crude remains elevated at $100 per barrel, India’s current account deficit (CAD) could widen to around 2 per cent of GDP, compared with roughly 1 per cent if oil prices remain near $70 per barrel.\n\n
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\n The report also suggested that the Indian rupee could weaken further to around 94–95 against the US dollar under such conditions, reflecting higher import bills and pressure on the country’s external sector.\n
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\n A major risk factor remains potential disruptions in the Strait of Hormuz, one of the world’s most critical oil transit chokepoints. Any prolonged interruption in shipping routes beyond mid-March, combined with delays in restoring production from affected oil suppliers, could intensify supply constraints and keep energy prices elevated.\n\n
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\n Elara Securities noted that the projected fiscal cost assumes the government would cut excise duties on petrol and diesel to offset under-recoveries faced by oil marketing companies. It also factors in higher subsidies for liquefied petroleum gas (LPG) to cushion households from rising fuel prices.\n
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\n While the report said the government could absorb the fiscal impact of a short-term oil shock through internal buffers, a prolonged period of elevated crude prices could create deeper economic challenges.\n\n
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\n These include reduced tax collections due to slower economic growth, which could further widen the fiscal deficit and potentially force the government to scale back capital expenditure plans.\n
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\n The report cautioned that a prolonged geopolitical crisis combined with sustained high energy prices could pose a broader risk to India’s macroeconomic stability and fiscal position.","readDurationInMinutes":"4","author":{"name":"Firstpost","logo":"https://glance-mob.glance-cdn.com/public/bubble/png/28d65284-7c7e-4e74-a1da-84b4daef1e4c.jpeg"},"ism":false,"analyticsResponses":[{"measurementId":"DUMMy","type":"GA"}],"pointerSummary":["Oil prices surge to $100/barrel, straining India’s finances.","Report: $100/barrel oil could add ₹3.6 lakh crore annually.","CAD may widen to 2% of GDP; rupee could weaken to 94-95."],"tags":["IndiaEconomy","CrudeOilPrices","MiddleEastCrisis","FiscalBurden","CurrentAccountDeficit","IndianRupee","ElaraSecurities","FuelSubsidies","OilMarketingCompanies","StraitOfHormuz","GeopoliticalTensions","MacroeconomicStability","EnergyPrices","LPGSubsidies","FiscalDeficit"],"redirectionEnabled":false,"consent":true}

$100 crude could cost Centre ₹30,000 crore every month as Middle East crisis threatens India’s finances: Report

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