Burden will be shared if oil remains above $110 a barrel, says CEA Nageswaran amid rising fuel prices

Chief Economic Adviser V Anantha Nageswaran's remark comes at a time when global crude oil prices are remaining close to $110 per barrel.

New Delhi: Chief Economic Adviser V Anantha Nageswaran, on Tuesday (April 12), said that the burden will have to be shared between the government, oil marketing companies and consumers if global crude oil rates remain above the $110 per barrel for over a quarter.

Nageswaran said that the outcome of fuel price will depend on the demand disruption caused due to high prices. His remark comes at a time when global crude oil prices are remaining close to $110 per barrel. 

The hike in the global crude oil prices is leading to an increase in the retail rates of petrol and diesel in India and other countries. Since March 22, petrol and diesel prices have been increased by more than Rs 9 per litre. 

"I feel if the prices persistently remain above $110 per barrel, then a burden-sharing needs to take place. It will involve the government, the oil marketing companies and the consumers," CEA Nageswaran told CNBC TV18. 

"The burden needs to be shared because this is a global supply shock, and therefore, all of us would have to bear the consequences. It has not been engineered by anyone," he reportedly said. 

Meanwhile, in an industry event, Nageswaran asserted that the economic situation is likely to improve during the year. He also expressed hope that the private sector is expected to accelerate capital expenditure from the second half of the current fiscal. Also Read: Supertech insolvency matter: NCLAT stays formation of committee of creditors till April 19

"Bank credit is beginning to pick up especially in MSME sector. Therefore, I think probably by the end of the second quarter or in the second half of the year, private sector picking up the baton of capital expenditure... Sooner rather than later Indian private sector will pick up the capital expenditure baton and run with it," he said. Also Read: 7th Pay Commission: 1 lakh pensioners to receive allowances as per 7th pay scale