Be prepared for 'high oil price regime', warns Montek

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Agencies

Posted online: Thursday , July 03, 2008 at 05:02:46

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New Delhi July 3: Planning Commission said on Thursday that the nation should be ready for "high oil price regime" amid a continuous surge in global crude prices.

Deputy Planning Commission Chairman Montek Singh Ahluwalia's statement coincides with the Petroleum Secretary M S Srinivasan's comment that India will review the retail prices in October.

"We have to move to a high oil price regime," he told reporters on the sidelines of Diamond Jubilee function of the Institute of Chartered Accountants of India (ICAI). He, however, said economic growth could slow down to 8 per cent in the face of high crude prices and inflation. Government had increased the fuel prices on June 5, a move that propelled the inflation to a 13-year high of over 11 per cent.

As regards the fiscal deficit, he said, "There is nothing sacrosanct about the number...My personal view is that when we face a shock... some of the shock will be reflected in the budget."

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