How does the fall in petrol and diesel sales due to onset of monsoon affect the Indian economy
Explain the impact of monsoon on the sales of petrol and diesel and the economy.
- As a major importer of crude oil, a drop in petrol and diesel sales can reduce India's import bill and improve its trade balance
- The drop in demand for fuel can lead to lower prices, which can reduce the cost of production for businesses and eventually translate into lower prices for consumers
- However, it can also lead to lower tax revenues for the government, since fuel taxes are an important source of revenue
- Lower demand for fuel can also have an impact on the stock prices of oil marketing companies and impact the overall sentiment in the equity market
- On the other hand, a good monsoon can lead to higher agricultural output, which can boost rural demand and economic growth, offsetting the impact of lower fuel sales to some extent
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a year ago