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5) Discuss the factors influencing global oil prices in brief with emphasis on role leaders play in shaping oil prices? How should India respond to these price vagaries in oil?(250 words)

Topic– Indian economy – Issues

5) Discuss the factors influencing global oil prices in brief with emphasis on role leaders play in shaping oil prices? How should India respond to these price vagaries in oil?(250 words)

Indianexpress

Why this question

The article discusses the various factors at play in determining oil prices with a special emphasis on personality factor in determining prices. In light of the uncertainty regarding oil prices which affects India in myriad ways, we need to prepare this question.

Key demand of the question

The question expects us to bring out the various factors which have a role in determining oil prices with an emphasis on the role played by personality factor in determining oil prices. Thereafter, we need to discuss a series of steps in short term and long term through which India can secure itself against such variance in oil prices.

Directive word

Discuss – Your discussion should bring out the different factors which have a role to play in determining oil prices with an emphasis on the role played by personality factor.

Structure of the answer

Introduction – explain the current situation where rising oil prices have given a macroeconomic shock to India. Highlight that this is a regular occurrence.

Body

  • Discuss the factors affecting oil prices – drivers of demand, supply and inventories have often been scrambled by the intangibles of Wall Street speculators and geopolitics.
  • Discuss in detail the impact of personality of leaders in determining oil prices. Give instances where personality factor played a major role in oil prices determination
  • Explain how should India respond to such a situation in short term and long term. Examine using taxes as a recourse in short term to alleviate the issues faced as a result of oil prices. In the long term explore the rise of renewables, strategic oil reserves etc as ideas which can help India deal with such variations.

Conclusion – Discuss the way forward for India.

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