Plan panel expects further surge in crude oil prices

The Planning Commission expects global crude oil prices to rise further in the backdrop of expansionary policies being followed by many developed countries to counter the financial crisis.     

"With global recovery in sight, we can expect some hardening of prices in the years ahead," the Commission said in a note on the current economic scenario prepared ahead of the meeting of the full plan panel to be chaired by Prime Minister Manmohan Singh.     

Having plunged to $34 a barrel in December 2008, following the crisis triggered by collapse of America's iconic investment banker Lehman Brothers, crude oil prices breached $140 a barrel mark in July last year. 

 

The average crude prices of the Indian basket is currently hovering around $72 per barrel, according to oil ministry officials.     

Crude prices, the Commission said, was expected to firm up further, "since most industrial countries are engaged in relatively expansionary fiscal policies and a correspondingly accommodating monetary policy." 

Although several countries are talking about "exit strategy" to withdraw the incentives doled out to combat the crisis, the Commission noted, "an immediate reversal of the counter cyclical stance is not likely in the current year."