The impending attack on Syria could put paid to India’s hopes of containing its current account deficit anytime soon, particularly at a time when the rupee is in free fall against the dollar.

Going by experts, the Indian crude basket could touch $117-120 per barrel from the current $109 per barrel should the attack go through.

That would severely limit the government’s ability to pay for the crude it imports.

Worse, it would send up fuel costs within the country.

For every $1 per barrel increase in the crude basket, the price of petrol – the only deregulated mass retail product – will increase by 60 paise per litre at a constant exchange rate, said Gagan Dixit, senior analyst with brokerage Quant.

At around $120/barrel, therefore, we would be looking at a hike of at least Rs 6 per litre. But, if the rupee also depreciates by 100 paise against the dollar at the same time, the value of a litre of petrol should increase by a further 90 paise per litre, said Dixit.

This means, should the Syria attack take place and simultaneously, the rupee falls 100 paise, petrol price could rise a whopping Rs 15 per litre.

The government would be forced to raise diesel price, too, notwithstanding the compulsion to subsidise the costs and keep inflation low ahead of the poll year.

Notably, the $4.5 per barrel rise in the Indian basket of crude and the 555 paise fall in the rupee in the last three days have resulted in the price per barrel zooming by Rs 901 to Rs 7,831.

Last fiscal, India imported Rs 784,652 crore worth of crude oil.

But this year, in just the first four months of the fiscal, India’s crude import bill has already touched Rs 266,917 crore, a value almost equal to the total crude import bill of 2007-08, which stood at Rs 272,699 crore.

Industry experts feel that with the current pace of rupee drop and the looming Syrian crisis, we could see an all-time high crude import bill of almost Rs 10 lakh crore.

Most experts, though, feel the impact of the Syrian crisis would be more of a blip.To be sure, Syria itself is not a significant oil producer.

According to Vandana Hari, Asia editorial director, Platts, a leading commodities research and analysis firm, its output slumped from an average 333,000 barrels per day (bpd) in 2011 to about 182,000 bpd in 2012 as the revolution took hold, and exports went from around 114,000 bpd on average to zero.

The real worry is the possibility of contagion enveloping other oil producing countries such as Iran, Saudi Arabia and Russia.

Hari said nearly 23 million bpd of the 12-member Organisation of Petroleum Exporting Countries’ crude exports come from its Middle Eastern members, a quarter of the world’s supply. An escalation of conflict in Syria has the potential to become chaotic for the Middle Eastern region and its customers.

“While the stand-off continues, the oil market is bound to be on the edge with panic buying, and prices could continue firming until the tension subsides. Or they could soar to new record highs if a strike goes ahead,” she added.

The Indian crude basket typically represents an average of Oman and Dubai for sour grades and Brent (Dated) for sweet grade in the ratio of 68:32.

In the last one week (since the chemical weapon attack suspected to be perpetrated by the ruling regime in Syria), crude prices have risen by $5 per barrel to $111.33 per barrel for Dubai grade and $111.43 for Oman grade, while Brent has gone up by $6 per barrel to $117 per barrel.

Since the Indian basket is always close to $8 per barrel at discount to the Brent, reaching last year’s high level of $117 per barrel for the India basket (in April 2012) is not too far away as expectations are that Brent might touch $125 per barrel.

“Rupee is damaging and at the same time the Syrian crisis is worsening. In such a situation, I expect the Brent to scale a high of $120-125 per barrel in the coming future,” said Dixit of Quant.

To India’s luck, the rupee too is nose-deep in water this time around and still sinking.

The rupee was trading at 51.86 to the dollar in April last year. It closed Wednesday at 68.80, down nearly 33% from that mark.

An ex-director finance of a leading oil marketing company said the companies typically keep an inventory of two weeks, which should ideally be higher in view of the crisis. But in the current situation, increasing imports is easier said than done.