Crude oil price is moving towards its record high level of $147.50 per barrel. This has increased the cost of crude oil importing countries. European countries and India import the bulk of their consumption. However, the US and China have the largest consumption of crude in the world. Apart from India, Brazil, Mexico and Indonesia are also included in the most importing countries. OPEC has promised a modest increase in crude supply next month. On the other hand, due to the sanctions, the supply of 11 million barrels per day from Russia is expected to be affected. Do you have any idea how big a problem this is going to be? Actually, no matter how expensive the oil becomes, its effect on its consumption is less visible. Also read: Russia-Ukraine Conflict: Luxurious Palaces, Expensive Yachts, Private Jets… Putin’s wealth list is bigger than this because it is difficult for people and businesses to reduce the expenditure on oil. People have no other option but to put petrol in the car, buy cooking gas or run the generator. This is the reason that when the fuel becomes expensive, people start reducing their essential expenses. The situation may worsen due to high inflation and the RBI raising interest rates. On the other hand, governments are not as helpless as they appear. If they act swiftly, this could be a big opportunity to reduce the budget deficit, reduce the demand for petrol and reduce pollution. For this, the government will have to focus on public transit. Generally the retail prices of petroleum are never the same as the prices of petrol and diesel coming out of the refinery. Retail prices of petrol and diesel almost double in Europe and Asia. Many countries subsidize petrol and diesel. According to a study by the International Monetary Fund, most oil exporting and emerging countries subsidize petroleum. In 2018, this subsidy was worth $760 billion. It is expected to increase further this year. This is because rising oil and gas prices will increase the subsidy bill. ,
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