NEW DELHI: Senior officials said the price situation in the country remains comfortable and is unlikely to see any major rise against the backdrop of the conflict in West Asia, stressing that the Center is closely monitoring and working to ensure steady supplies.Key ministries are monitoring the situation daily, and the Prime Minister’s Office is closely monitoring the situation and making efforts at the “highest levels” with several countries to secure supplies ranging from energy to fertilisers, officials said. Review meetings are held regularly in the PMO to identify any pressure points and take immediate remedial action.The assessment is that the impact on inflation due to the rise in global crude oil prices at present will be within “permissible limits” as diesel and petrol prices are not hiked.
The price of Brent crude crossed the $92 per barrel mark on Friday and expectations are that it could rise depending on the extent and duration of the conflict, but the measures announced by the United States on Russian oil could help ease supplies somewhat.The latest Finance Ministry report said that scenario-building exercises on the macroeconomic impact of higher oil prices indicate that crude oil prices must remain above $100 per barrel for an extended period for macroeconomic aggregates to reflect the pressures.
The Center also took note of comments that the conflict might be “protracted” and made plans accordingly to deal with the situation, officials said. One of the officials said, “Discussions are taking place at the highest levels to exploit alternative sources of gas and oil supplies,” noting that these supplies may arrive within 35 to 40 days.The latest data shows that retail inflation reached 2.8% in January, the first reading in a new series of data released in February, with many new additions and food weight reductions.
The number is within RBI’s ‘comfort level’.Regarding the fertilizer stock situation, the official said that it is still “easy” for the next planting season, pointing out that the urea stock in March this year was higher than last March. The official said: “There are discussions to secure supplies and ensure that there is no pressure.” The only concern at the moment is the country’s exports, as shipments have been affected by the ongoing conflict. Officials said that the Ministry of Commerce is taking steps to alleviate the suffering of exporters in addition to finding alternative markets as part of the diversification plan.