Crude oil prices hike following Ukraine crisis: Fuel prices to go up

Crude oil prices hike following Ukraine crisis.

Till Tuesday, Crude oil prices were as low as $95/barrel. The driving force behind the low prices was the positive sentiment of seemingly a scope a negotiation between Ukraine, Russia and US. However, later the day, due to fears of supply disruption, the barrel prices went upwards at $99/barrel.

Crude oil prices hike today:

• Crude oil prices surge to $105/barrel. It is for the first time in 8 years which is since 2014. In the afternoon, Brent crude reaches $100/barrel mark.
• The crude oil price hike will come as a double blow to the world’s economy causing injury to growth and fluctuating inflation beyond expectations.

Implications of price hike for the world and India

• Firstly, the prices hike will sure take a toll on growth and inflation. There are reports that in cities like Birmingham, UK, panic has already got the best of people and there are lining up in queues to purchase petrol.
• Now, with every 10% increase in crude oil prices, the WPI (wholesale price index) in India increases by 0.9-1.0%. While, CPI (consumer price index) rises by 0.4-0.6%.
• For macro dealings of India, India will observe expensive oil import bills with inflation.
• For civilians, it means price hike of fuel.