Lower crude prices: A boon or a bane?

Crude oil can be a boon for consumers

Prices of Brent crude have been hovering near a three-year low of $70 per barrel. The Indian crude basket has witnessed a 6 percent decline in September compared with the previous month, while prices have been trading 21 percent below last year’s level. While lower crude oil is expected to maintain wholesale inflation, its impact on inflation would be determined by how much gets passed through to consumers. But it will undoubtedly bring a respite for the government in the form of a lower current account deficit and higher revenues. On the offside, it could also upend fiscal mathematics by lowering nominal growth and impacting fiscal deficit, which is calculated as a percentage of nominal GDP. Moneycontrol takes a look at four charts:

Crude price dip will lower wholesale inflation