So how will rising oil prices hit you? Hard, very hard.
Not only will you be paying through your nose for fuel, as India tries to bring fuel prices in line with global tags, you will now see the prices of all other commodities shoot through the roof too.
Oil prices have a ripple effect on the economy. When oil prices rise, the prices of almost all commodities see an increase too. The prices of food, essential commodities and anything that is related to energy will become more expensive. Travelling will become costlier. This will hurt Indian consumers more as inflation
has already crossed a high of 8.1 per cent.
Inflationary pressures will rise further with the hike in fuel tags and thus make life very, very difficult for the common man.
So is there any hope? Well, the International Monetary Fund hopes that prices may start to fall once a global growth slowdown sets in.
But the drop in oil prices will be limited, as high prices reflect soaring oil production costs, and OPEC is likely to reduce quotas in response, says the IMF.
However, it is difficult for international oil prices to fall when there is no fundamental change in the basic factors affecting price. According to Goldman Sachs it is expected to increase to $141 in the second half of 2008.
Image: Petroleum Minister Murli Deora. | Photograph: Enrique Hernandez/AFP/Getty Images
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