Crude Oil Price

India imports the large majority of its crude, so the oil price feeds directly into the trade deficit, the current account, the rupee, inflation and the fiscal position through fuel taxes and subsidies. A rise transmits through all five channels at once, which is why it is watched as a macro variable rather than as a commodity price. Sector effects run in opposite directions: refiners and oil marketing companies are affected differently from airlines, paints and tyre makers, for whom crude derivatives are an input. The relationship is well established in direction and highly variable in magnitude.