RELATIONSHIP BETWEEN INTERNATIONAL CRUDE OIL PRICE AND THE INFLATION RATE (CPI) IN INDIA FROM 2011 TO 2014
- Research Scholar (Ph.D MANF SRF), Jamal Mohamed College, Tiruchirappalli, India.
- Associate Professor of Economics, Jamal Mohamed College, Tiruchirappalli, India.
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India meets 70% of its energy needs by crude oil imports. The Price of Petroleum (per barrel of Crude oil of 159 liters) at the international market influences the prices of domestic petrol and diesel (domestic prices linked to International energy derivative market). Any fluctuations in the international crude oil price influence all other macro economic variables and Inflation too. CPI (consumer price Index) is said to be a perfect measure of inflation by the economist. So, for the accurate prediction of the relationship between petroleum price and inflation, the CPI inflation is considered for the analysis. The study proposes to use Augmented Dickey-Fuller Test (ADF) unit root test and Granger Causality test. Crude oil price and CPI Inflation monthly data from 2011 to 2014 were used to find the exact relationship. Apart from that the paper focuses on the petroleum pricing policy of India in brief. The study confirms with the empirical analysis that the consumer price Inflation is not influenced by the hike in crude oil price.
[B. Mahammad Rafee and A. Hidhayathulla (2015); RELATIONSHIP BETWEEN INTERNATIONAL CRUDE OIL PRICE AND THE INFLATION RATE (CPI) IN INDIA FROM 2011 TO 2014 Int. J. of Adv. Res. 3 (May). 242-250] (ISSN 2320-5407). www.journalijar.com
