Crude oil is the world economy‟s most important source of energy and is therefore, critical to economic growth. The price of crude in global market is essentially driven by supply and demand. The performance of world economy in general and the world‟s largest economies such as US, Japan and recently China have a significant impact on the demand for crude oil and vice versa. The various method developed by IMF, World Bank(WB) and OECD have estimated that 10 dollar increase in crude oil prices would lead to a decline of world production of goods and services by 0.5%. The world economic growth and world oil demand are moving in tandem and there is high correlation between world economic growth and demand for oil. It is essentially the supply that drives the prices of crude oil. Many researchers agree in opinion that no other economic event in post-World War II era generated as much attention as the series of oil price shocks, mainly produced by OPEC countries. No studies were necessary to see the clear relationship between oil prices and main economic indicators. Nevertheless, this issue was new and researchers posed such a question as the numerical impact of oil shocks and their correlation with the policy conducted by government in order to predict the best instrument to cope with the negative impacts caused by oil price increases. Since then a large number of studies have reported a correlation between increases in oil prices followed by economic downturns. 

Key words:  indian oil, madurai, service, customer, economic, consumer.