As global crude oil prices soar with violent anti-establishment protests in major oil-producing nations in West Asia and North Africa, especially Libya, India's industrial sector may take a adverse hit as the country imports 70 perecnt of the total crude oil it uses. Industry body ASSOCHAM hinted at an oncoming slump in industrial growth, if the situation in Libya is not diffused.

ASSOCHAM's warnings could prove true as Libya is Africa's largest crude oil producer and the continent's fourth-largest exporter.

“Rising geo-political concerns in Libya has led to fears of disruption in supplies”, reads a communiqué from the industry body. It further cautions that rising inflation could impact investments and the hyper- inflation that India has been experiencing shows that prices of primary articles and energy inputs are pushing inflation to higher levels .The core inflation that reflects rise in prices of non-food manufacturing products in contrast has only increased by just one-third of the rate at which overall inflation increased”. “The direct fall out of this persistent skewed trend is postponement and cancellation of capacity expansions plans in the industrial sector," ASSOCHAM president Dilip Modi said.

With the political unrest spilling over from Egypt and Tunisia to the other major oil producing countries of the West Asia and the North Africa regions including Libya, Bahrain, Yemen, Morocco and Iran, oil prices touched a two-year high. The Brent North Sea crude for delivery in April is up 22 cents at 106 dollars a barrel.

 
 
 
 
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