GOVERNMENT IS ABSORBING THE OIL SHOCK : WHO ULTIMATELY PAYS THE BILL ?

What happened: The Centre, state governments, public sector oil companies and the RBI are collectively absorbing a significant part of the burden of elevated crude oil prices to cushion consumers and the economy. Key numbers: Combined support estimated at around 1.7% of GDP, assuming average crude prices of $100 per barrel this year, per an Axis Bank Research report dated October 23. Why it matters: The cost of this support is rising, raising questions about how long the government can absorb the oil shock without putting pressure on public finances.

The Centre, state governments, public sector oil companies and the RBI are collectively absorbing a significant part of the burden of elevated crude oil prices to cushion consumers and the economy.

The cost of this support is rising, raising questions about how long the government can absorb the oil shock without putting pressure on public finances.