As petrol prices in the country are market- linked, any increase in international oil prices is likely to be passed on to consumers already reeling under inflation.
Diesel prices have also been partially freed and would end up higher.
This in turn would impart a cost- push effect to inflation as transport costs go up on account of raised truck charges. Shares of oil marketing companies
Higher crude oil prices would increase under- recoveries of oil marketing companies that sell at subsidised rates.
The government's subsidy bill would also go up leading to a weakening of the fundamentals of the economy.
According to a Reuters report, the jihadists in
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