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  1. 1. Presented by, Akshay Jari Suvigya Lal Nidhish Jain
  2. 2.  Petroleum products are useful materials derived from crude oil as it is processed in refineries. It is estimated that world consumes around 88 million barrels of each day. Petroleum is derived from two words:  Petra which means rock  Oleum which means Oil in Latin
  3. 3.  India consumes petroleum products of 4 lakh crores per annum. Growth of petroleum products was at 2.6% per annum in the Xth plan (2002-07) when the economy is growing at 8% per annum. Projected growth rate of India is about 2.4% per annum till 2030.
  4. 4.  Transport (Petrol, Diesel, CNG, Aviation Fuel) : 51% Industry (Petrol, Diesel, Fuel Oil, Naphtha, Natural Gas): 14% Commercial & Others : 13% Domestic (LPG & Kerosene): 18% Agriculture (Diesel): 4%
  5. 5.  United States 1,91,50,000 China 94,00,000 Japan 44,52,000 India 31,82,000
  6. 6.  Increase in Oil price leads to transfer of Income from importing country to the exporting country. Decrease in oil prices leads to be positive for importing countries and negative for exporting countries. Impact of Oil price increase for exporter country:  Directly increases the real national income through higher export earnings.
  7. 7.  Impact on Oil importer country:  Direct effect on Income losses from hike in price of petroleum products.  Impact at the micro level:  Increase in price of petrol diesel.  Increase in price of LPG  Increased prices leaves the household to spend less money on other goods and services.
  8. 8.  Increase in Inflation:  Directly affect the prices of goods made with petroleum products.  Indirectly affect the costs of Transportation, Manufacturing and Energy production etc.  Increase in these costs has direct affect on variety of goods as producers pass their costs incurred on consumers.
  9. 9.  Increase in Oil prices can depress the supply of other goods as they increase the cost of producing them. Increase in oil prices also affects the demand of goods because people are left with less money to spend on other goods.
  10. 10.  Higher production costs. Lower Income for the companies. Higher subsidies provided to them by government. Increase in price of petroleum products.
  11. 11.  India’s subsidy billed zoomed to 2.16 trillion or 2.5% of GDP. It was because of two reasons:  High crude oil prices.  Fertilizers subsidy primarily on account of imported non urea fertilizers.
  12. 12.  If crude oil price goes up or down Inflation moves in the same direction. If crude oil prices increases it directly affects the inflation rate, for eg. When the prices of crude oil went to the high of more than $100 per barrel it also affected the inflation which was around 12.28% which was highest in past two decades.
  13. 13.  When oil prices increases it affects the following:  Inflation Increases.  Government subsidy bill increases.  Foreign currency reserve reduce.  Exports become weaker.  Investment decreases.  GDP is affected negatively.