Crude oil prices are expected to increase in the international market amidst ongoing tensions in Syria. Global research firm J.P. Morgan has feared on Monday that the move could cost petrol prices at Rs 90 per liter in India.
According to JP Morgan, tension has increased in the Middle East due to recent attacks by the United States on Syria. Since the oil producing country Iran is also in favor of Syria, there has been an increase in the fear of a new US ban on Iran. India imports most of its requirement of oil, which is paid in US currency dollars. In such a situation, if prices rise, we will have to pay a lot of dollars, which will affect the rupee. If the dollar demand is high then the dollar will be strong and the rupee will weaken, which will be a double blow for us. Morgan explained that currently the crude oil prices in the international market are the highest since 2014. At present, the price of petrol in Mumbai is about Rs. 82 per liter, which can go up to 90 rupees.
Rise in inflation expected
With the rising oil prices, the rupee will weaken, which will make import of all types expensive and also increase the risk of inflation. Crude oil will have to pay a higher price, which will directly impact the government’s fiscal deficit and the government’s borrowings will increase. Due to this, the common man is also expected to face troubles.
Syrian influences on fuel prices
According to JP Morgan, although Syria produces only 0.04 percent of global petroleum supply. But many countries in its neighborhood are big oil producers. Syrian border meets Iraq, which is the second largest member of the oil-producing organization OPEC. Besides, it also has large oil producing countries like Saudi Arabia and Iran. Therefore, Syrian tensions will also affect these and oil prices will increase.