Petrol and diesel prices
The increase in the prices of petrol and diesel is expected to increase inflationary pressure on the economy, due to which transportation and manufacturing costs may increase in the coming months and general consumption goods may become expensive. Rating agency CRISIL made this estimate in a report released on Tuesday.
The report says that since May 15, the prices of petrol and diesel have increased by about Rs 7.5 per liter and if the prices of crude oil remain at a high level, then this increase can reach Rs 10 per liter in the near future. Crisil said, its impact will be visible through increase in transportation costs across the economy, which will lead to increase in inflation of both food items and other commodities.
Everyday things can be expensive
According to the report, the increase in fuel prices will have a direct impact on inflation. An increase in fuel prices by Rs 7.5 per liter can increase retail inflation by about 0.36 percent. If fuel prices increase by Rs 10 per liter, retail inflation can increase by about 0.48 percent. The report said that the increase in fuel prices will have the biggest impact on road transport because about 42 percent of its cost is dependent on fuel. This will make freight transportation expensive and will affect the prices of everyday goods. About 71 percent of freight transportation in the country is done by road.
The burden on your pocket will increase further!
According to CRISIL, increase in transportation costs may lead to a rise in prices of food products like milk, fruits, pulses, tea-coffee, spices, eggs, meat and fish as they are largely dependent on transport networks. The report says that costs will also increase in sectors like textiles, consumer electronics, wood products, cement and ceramics. Chemicals, coal and metal sectors will also be hit by inflation. In such a situation, companies can pass the cost on to consumers or cut the quantity of the product. The reduction in GST rates in September 2025 may provide some relief but it will not be able to completely balance the impact of higher energy costs. According to the report, the average price of crude oil in the first two months of the current financial year has been $ 112 per barrel, which is more than the estimate of $ 95 per barrel for the entire year.
Weak monsoon can increase problems
Although overall inflation is currently below the four percent target of the Reserve Bank of India, it is expected to increase in the future. Still, it may remain in the range of two to six percent of the Reserve Bank. The Reserve Bank will continue to monitor inflation trends, particularly domestic expectations and broader price rise risks. Along with this, the report says that the Reserve Bank will also keep an eye on meteorological conditions like weak monsoon and El Nino, due to which there is a possibility of increase in food inflation.
