India Fuels Inflation by Bailing Out Refineries

Soaring oil prices have forced Indian authorities to raise subsidized fuel prices and risk propelling inflation that is already running at a three-year high. The Indian government subsidizes most fuel costs, meaning state oil firms are forced to sell fuel at hugely discounted rates to shield consumers from inflation. But with the price of oil soaring to a recent high of $135 a barrel, refineries have been unable to cover costs and pressed to the point of bankruptcy. The inability to pass high prices onto consumers cost state-run refiners about $43 billion for the year ended March 31, Serangulam V.…