 "Budget to assume crude oil price of $55-$60 bbl for FY18")
Budget 2017 is being prepared assuming an average crude oil price of $55-60 a barrel for the coming financial year. At those prices, the petroleum subsidy bill for next year would be a comfortable Rs 26,000-27,000 crore, similar to this year, it is assumed.
If the oil prices cross $65 mark, the government could come up with a burden-sharing mechanism, where higher prices will be equally absorbed by both consumers and the government.
The Opec has announced it will reduce production by 1.2 million barrels a day to 32.5 million barrels a day from January 2017, which could lead to a higher crude oil price regime.
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