Day Of The Drone At The Desert

Last month featured a drone attack on facilities owned by Saudi Arabia’s petro-giant, Aramco. This led to a spike in global crude oil prices and petrol and diesel prices shot up sharply. The RBI Governor pointed out that if crude prices stayed high, India’s trade balance (the difference between exports and imports) could be badly affected. This is a good moment to think about India’s exposure to crude and gas prices. India imports over 80 per cent of its crude, and 30 per cent of its gas. In per capita terms, India has low consumption of energy. As the economy grows,  energy usage and imports will rise. Oil and gas are necessary goods. The demand for necessary goods doesn’t change much with price fluctuations. Think of it this way. If the price of petrol halves, you won’t buy twice as much petrol. You will  use the money for something else. On the...