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Crude oil prices are now roughly half of what they were when Narendra Modi came into power in 2014. The odds of returning to USD 90-100 a barrel any time soon look slim, even after oil producers – both OPEC and non-OPEC – agreed to cut oil output late in 2016.

Observers have given a margin of USD 40-70 for crude oil prices by the end of the year. This wide range reflects an era of volatility – neverending geopolitical turmoil in major oil producing nations, plus the increase in US shale oil drilling, part of the Trump administration’s “America first” energy policy.

The impact on India is multifold. India currently imports more than 80% of its crude oil and 40% of its natural gas. According to S&P Global Platts, with the country’s ever-increasing oil demands, this number is unlikely to reduce. Indian oil firms seem to have taken note: Oil and Natural Gas Corp. Ltd. (ONGC) has five projects worth USD 1.1 billion in the pipeline to raise domestic production.

In the same three-year period that’s seen the election of Modi and the collapse of crude oil prices, the S&P BSE Oil and Gas Index has gained more than 50%. Oil marketing and downstream companies such as Bharat Petroleum Corp. Ltd., Indian Oil Corp. Ltd. and Hindustan Petroleum Corp. Ltd. have also witnessed a threefold surge in share price, along with gas distributors and importers. Their peers, however, such as ONGC and Oil India Ltd. have underperformed.

Of late, Indian oil and gas marketing companies have turned their attention to local pricing: oil and gas stocks rose after reports that state-run oil firms have met government officials to consider dynamic fuel pricing.

The introduction of daily price revisions would bring India on par with international retail fuel markets and influence private oil and gas players to adopt the system. Stocks of IOC, Bharat Petroleum and Hindustan Petroleum, which represent more than 90% of India’s retail fuel market, all rose on this Indian stock market news. If companies do enact dynamic pricing, oil companies’ retail prices will better reflect crude movement and impact their overall margins positively.

Markets may react less favourably to upcoming quarterly results from oil and gas majors. According to data from BloombergQuint, seven oil and gas firms, including GAIL India Ltd. and Reliance Industries Ltd., are expected to show an aggregate decline in revenue for the January to March quarter, compared to the preceding quarter.

The flat net profit and sluggish earnings are on account of weak refining margins, fluctuations in crude and product prices and slower growth in domestic fuel consumption in the quarter.

While benchmark Brent crude averaged USD 54.6 a barrel in the January to March quarter – a 7% increase from the October to December quarter – experts expect this summer’s heavy driving season to help boost oil and gas prices, and as a consequence, explorers.

Looking ahead to how the movement of crude prices will affect India, if it remains under USD 60 a barrel, analysts expect markets to hold steady long term. Above that, consumers will feel the brunt of inflation and the government’s subsidy targets and budget estimates will be thrown into disarray.

Most estimates of crude prices hover on the low end for now, meaning consumers, investors and oil and gas firms may be in for a mixed financial bag.

For more of the latest business news, visit BloombergQuint.