cafeconomics

 When the world is reeling under inflationary pressures, OPEC+ has decided to cut down daily production to ensure that energy prices don't fall too much. Ethanol blending, investing in alternative sources of energy, investment in public infrastructure, strategic increase in oil imports from Russia are some of the measures taken by the government to tackle energy price issues in India. Please take a look at the chart below. Starting from 2001, the correlation between CPI Inflation and Brent Crude price is very high at 0.65 based on data sourced from investing.com, macrotrends.net, world bank. Close to 85% of India's energy needs are imported from outside India and therefore global demand and supply issues have a potent impact on India's growth ambitions. Whenever there is an increase in crude prices, the costs have to be borne by the government, OMCs or common people, in any case, this is depleting the much required growth capital. The multiplier impact of increase in energy...