Fuel price hike fuels inflation pressure across sectors

Airlines are likely to be among the most affected sectors, as ATF costs rise with crude prices

- Srushti Vaidya

Higher fuel prices are expected to feed quickly into logistics and freight costs, with transport operators unlikely to absorb higher diesel expenses.

(AP)

India’s petrol and diesel price hike, alongside a volatile crude oil outlook, is set to ripple across key sectors and is already feeding early market pressure, with analysts warning of further inflation if global oil prices climb.

Oil marketing companies (OMCs) finally bit the bullet and raised prices of petrol and diesel by around ₹3 a litre on Friday amid elevated global prices. More hikes are expected going ahead as under-recoveries remain high.

Higher fuel prices are expected to feed quickly into logistics and freight costs, with transport operators unlikely to absorb higher diesel expenses, triggering cost pass-through across supply chains and sectors dependent on transportation and energy-intensive inputs, potentially widening inflation pressures across the economy, according to experts.