Crude oil prices have soared by around 60% this year, creating a major headache for the central government. Food prices have also gone up due to rise in fuel prices. The World Bank has warned that crude oil prices will fall 11% in 2023, but remain 75% above the five-year average.
The price of crude oil was around $65 a barrel at the beginning of the year, and rose more than 60 percent to $107 in June. Due to the price hike, the prices of food grains also went up. The central government struggled to keep prices down by buying crude oil from Russia at discounted rates. Meanwhile, the US raised interest rates to control inflation. This strengthened the dollar. As a result, investments in dollars have accumulated and the value of the rupee has fallen. This decline has further complicated the situation in India.
A World Bank report said prices of most commodities have fallen from their recent highs amid fears of a possible recession. However, the currencies of most developing economies have depreciated, pushing up food and fuel prices. This risks exacerbating the food and fuel price crises those countries already face. Almost 90% of developing countries saw an increase in wheat prices in local money terms.
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Brent crude oil prices are expected to average $92 a barrel in 2023. That’s above the five-year average of $60. We forecast both natural gas and coal prices to decline in 2023 from record highs in 2022. By 2024, Australian coal and US natural gas prices are expected to double their five-year average prices. Similarly, European natural gas prices are almost four times higher. It has been said.
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