Just about a decade back, crude oil price in 2000 was at a bottom of $10/ barrel. And in the seventies crude oil prices were in range of $3/ barrel. Then as we all know that was the meteoric rise of crude oil price to a high of $175 /barrel in 2008- a whooping increase of 17.5 times in just eight years – the previous high of crude oil being $33/ barrel in the 1990’s. The high of 2008 was an increase of 5.3 times over the high touched in 1990’s. By now you must get the drift. In 2008, with crude oil at a high of $175 / barrel, every body was expecting the price to go to $ 300/ barrel & more. But I made the correct prediction in my blog - www.rupeekul.blogspot.com- that crude oil is headed for a massive correction- read the blog dated 6june,2008- ‘crude prices at record highs’.
In India, retail prices of petrol, diesel etc. are heavily susidized by the govt.. At import parity , with present crude prices at $78/ barrel- the retail price of petrol will be approximately Rs 70/litre.
By conservative estimates, one can easily say that in the next cycle of increase crude oil prices, they might increase say 3-4 time their previous high of $175/ barrel. The next record high of crude might be in range of $525-700 /barrel. Hard to imagine, isn’t it? But then the crude oil price was just $10/barrel just as recently as 2000.Hence in future we are headed for super high inflation. Be prepared for it.
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