{"id":183043,"date":"2022-05-06T20:16:11","date_gmt":"2022-05-06T14:46:11","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=183043"},"modified":"2022-05-06T20:16:11","modified_gmt":"2022-05-06T14:46:11","slug":"inflation-and-what-to-do-about-it-secure-cheap-russian-oil-at-least","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/inflation-and-what-to-do-about-it-secure-cheap-russian-oil-at-least\/","title":{"rendered":"Inflation and what to do about it: Secure cheap Russian oil at least"},"content":{"rendered":"\n<p><strong>Context<\/strong>: The current price rise in Indian economy is largely driven by the non-core elements in the retail consumption basket. The food element in the non-core is being driven up both by primary global supply shortages and the rise in the fuel cost of transporting food. The key, therefore, is the cost of fuel.<\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><em>Core inflation = Headline inflation &#8211; Non-core elements (food and fuel)<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>India secured Russian crude oil in the face of sanctions, reportedly on offer at a discount of $20-30 per barrel. This raised hopes of inflation control without having to resort to monetary contraction.<\/p>\n<p>But, the impact of discounts will take time to take effect.<\/p>\n<h5>Why cheap Russian crude oil is not helping bring down cost of fuel?<\/h5>\n<p>A Bloomberg article authored by Serene Cheong and Debjit Chakraborty identifies the problem as the following:<\/p>\n<p><strong>&#8211;<\/strong> <strong>The way Indian oil refineries source crude oil<\/strong>\u2014by a call for tenders from trader intermediaries, few enough in number to form oligarchies which collude on prices.<\/p>\n<p>The deep discounts on Russian crude are reportedly <strong>being pocketed by those traders,<\/strong> while refineries continue to pay what might at best be a marginally discounted price.<\/p>\n<p>There exists an oligarchic hold of intermediaries in the global market for oil. Global markets for primary commodities are characterized by <strong>powerful price-maker intermediaries.<\/strong><\/p>\n<h5><strong>Way forward<\/strong><\/h5>\n<p>Both headline and core will benefit enormously if India can manage to secure those large discounts on Russian crude.<\/p>\n<p><strong>Source<\/strong>: This post is based on the article \u201c<strong>Inflation and what to do about it: Secure cheap Russian oil at least<\/strong>\u201d published in <strong>Livemint<\/strong> on <strong>5th May 22<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: The current price rise in Indian economy is largely driven by the non-core elements in the retail consumption basket. The food element in the non-core is being driven up both by primary global supply shortages and the rise in the fuel cost of transporting food. The key, therefore, is the cost of fuel. Core&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/inflation-and-what-to-do-about-it-secure-cheap-russian-oil-at-least\/\">Continue reading <span class=\"screen-reader-text\">Inflation and what to do about it: Secure cheap Russian oil at least<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501],"class_list":["post-183043","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704743408},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=183043"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183043\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=183043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=183043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=183043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}