Petroleum Price Volatility On Macroeconomic Indicators In India

Abstract

The selling price of petrol and diesel in the domestic market is determined by the volatility of crude oil price in the international market and taxes and excise duty imposed on it. India is heavily dependent on foreign countries to meet its growing petrol-diesel demand. Consequently, net trade balance reflected in the BOP is always adverse, which in turn adversely affects all the macroeconomic indicators and thereby, the poor performance of the entire economy. So attempts should be made and petroleum price fluctuations in India must be controlled to reduce the current inflation and to maintain a balanced growth rate in the economy.