Oil price rise to inflate import bill by up to $50 billion: DEA Secretary

Remaining non-committal on cutting excise duty to ease the burden from rising oil prices, the government said today that the recent spurt in global rates is a matter of concern as it could inflate import bill by as much as USD 50 billion and impact current account deficit (CAD).

Economic Affairs Secretary Subhash Chandra Garg said however that economic growth will not be impacted by the rise in oil prices, which have touched USD 80 per barrel -- highest since November 2014.

The government is watching the situation and adequate steps will be taken, he told reporters here without elaborating.

Asked if the government would cut excise duty on petrol and diesel, he said he has nothing to say on excise duty front. "Just watch."

The spurt in oil prices will push up the oil import bill by USD 25 billion to USD 50 billion under different scenarios, he said, adding that India spent USD 72 billion on oil imports last year.

This would push up current account gap, but inflation is under control and the fiscal deficit scenario is not worrisome either, he said.

Garg said currency in circulation has come down in the last four days but situation is completely normal now.

He also said that some outflows in the bond and equity markets have been seen but it is not alarming. "We are nowhere near a 2013-like situation," he said.

Outflow of USD 4-5 billion in one and half month is not excessive, he said, adding that the government will continue with its borrowing programme and does not see any reason to react.