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Follow-up to 2014 Thus Far: The Fall of Oil and Its Effects on Indian Fuel Prices; Crude Oil Prices in Rupee-Terms


Last week, we at Capital Mind had written about how Oil Prices had changed during 2014, and how those changes affected movements of fuel prices in India. In that report, we had charted the movement of the Indian Basket price of Crude Oil in Dollar terms, as compared to that of Petrol and Diesel Prices. As a follow-up to that piece, we have updated the chart slightly, to now show the relative movements of Crude Oil prices in Rupee terms (Thanks for the suggestion, Piyush!).

Here’s what the movements in the price of Crude Oil, in Dollar-terms and Rupee-terms, look like:

Change in Oil Prices_01

From the chart we can infer that:

  • In Rupee terms, the change in Crude Oil prices is more pronounced than in Dollar-terms (especially since July 2011 onwards).
  • The widening gap between the $-rates and Rs-rates began in July 2011 before which the INR/USD rate was near Rs. 44 to the $.
  • From then on, the Rupee began weakening, and its effect was to widen the gap between the 2 lines in the chart above.
  • The Rupee is currently at 63.5 to the Dollar. However the trends in both the statistics, despite the weakening of the Rupee, is still the same.

The updated chart showing the price of the Indian Basket of Crude Oil in Rupees is:

Crude Oil_01



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