How much should we worry about oil prices?

Indian policymakers need to watch the sector carefully but maybe there's no reason to get into a deep funk

Credit rating upgrade or not, there is enough reason to worry about the new googly that global markets have bowled at us – the sharp rise in crude oil prices. Eighty per cent of India’s oil needs have to be imported and even the bravest policymaker or economist will have to concede that 40 per cent cumulative increase in oil prices since June is bound to have do some damage to our macros. Thumb rules abound. A $10 increase in the price of oil per barrel jacks up our current account deficit by 4-45 basis points (bps); inflation moves up