In les than a year of Narendra Modi becoming the prime minister in May 2014, the price of the Indian Basket of crude oil crashed from $113 per barrel to $50 by January.
That was a bonanza for a government struggling to manage fiscal deficit and planning large social-sector spends. When prices came down, opponents attributed it to Modi’s luck and not his performance.
At an election rally in Delhi in February 2015, Modi said, “Ok, let’s accept that i am lucky but you have saved money. If Modi’s luck is benefitting the people, what can be more fortunate? If due to my good luck, prices of petrol and diesel come down and common man saves more, then what is the need to bring someone who is unlucky?”
Modi’s run of luck went on, and the oil prices tumbled to $29 by January 2016. After a three-year lucky run, he is running out of it. Tightened by OPEC-led production cuts, oil is sensitive to all kinds of shocks. Prices have already touched the above-$5 mark. India’s import bill has gone up and so has the current account deficit.
The oil-linked destiny
2018 could be an unlucky year for Modi so far as oil is concerned. His vanishing oil luck will hit overall economic prospects too.