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Iraq-driven oil spike threatens to blow hole in Indian budget - sources
June 18, 2014 / 6:05 AM / 3 years ago

Iraq-driven oil spike threatens to blow hole in Indian budget - sources

NEW DELHI, June 18 (Reuters) - India’s government sees oil prices going as high as $120 per barrel for three to four months because of fighting in Iraq, potentially driving a hole of at least 200 billion rupees ($3.4 billion) in the budget, two government sources told Reuters.

“If the oil prices remain high even for 3-4 months around $120 a barrel, it could have a significant impact on the fiscal deficit and economic growth,” a senior Finance Ministry official told Reuters on condition of anonymity.

Finance Minister Arun Jaitley presents his maiden budget next month and faces headwinds from a weak economy, a food inflation scare and now the risk that higher oil prices could swell the government’s oil subsidy bill. ($1 = 59.7000 Indian Rupees) (Reporting by Reporting by Manoj Kumar and Nidhi Verma; Editing by Douglas Busvine and Jeremy Laurence)

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