Global oil prices fell below the $60 per barrel mark on Tuesday, hitting a five-year low, though analysts said that the situation may help India tide up its fiscal deficit for the current fiscal.
Brent futures slumped as much as 3.3 percent to its lowest since May 2009 in london. While the West Texas Intermediate, the New York-traded grade, dropped below $55 for the first time in five years.
Industry experts in India however said that if oil prices remain within the $60 to $70 per barrel levels for the next few months, then this will further help the Government shore up its revenues.
"Oil prices are on a massive structural decline, owing to a well-supplied market and slowing global demand. It has been a huge help to improve the fiscal situation in India and it will be positive if this stabilizes at this level for a longer period of time," said Debasish Mishra, Senior Director, Deloitte Touche Tohmatsu India.
He added that "the challenge is, in the tussle between OPEC and the Shale Producers - someone will give up at a point and that would lead to a further sharp movement of price on either side".
Oil prices sank to new multi-year lows in Asia on Tuesday. Analysts said that they are weighing the possible political and economic fallout in oil-producing countries with little respite in the selling.