A STUDY ON RELATIONSHIP BETWEEN CRUDE OIL PRICE AND ECONOMIC GROWTH

Crude oil price is an important parameter for refining industries, which has a bearing on economy, because
it is vital input for productivity. There is a vast gap in demand and production of crude oil in India. National
oil companies are able to produce 23-24% of India's total requirements of crude oil. The production of crude
oil from public sector enterprises in India has been decreasing due to old and the maturity of the fields. India
is not self-reliant on crude oil production; therefore, it is necessary and inevitable to import the crude oil to
bridge the gap between demand and supply. The increase in international crude oil prices will make import
costly and raise the Indian crude basket price. Therefore, both international crude oil price rise and import
dependency on crude oil are the problematic area that may damage the Indian economy. This paper focused
on a study of relationship between crude oil prices and economic growth and also focused on the impact of
crude oil prices on some economic variables i.e. exchange rate, inflation, and financial markets.To analyze
the data statistical tools like Regression Analysis, correlation etc. are used. The result shows there is a significant
impact of changes in crude oil prices on economic variables.