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Business Desk- There is tension in West Asia. Due to this, fuel prices are continuously increasing. This increase in fuel prices is now going to affect those people who often order food through online delivery platforms.

Ordering food from platforms like Swiggy and Zomato is now going to be more expensive for customers. The rising prices of petrol and diesel are now affecting the operational expenses of food delivery and quick-commerce companies.

Ordering from Swiggy and Zomato will now be more expensive

According to a report by brokerage firm Elara Capital, recently fuel prices have increased by about Rs 4 per liter, due to which the prices of petrol and diesel have increased by about 4 percent. The main reasons behind this increase are said to be geopolitical tension and high prices of crude oil.

The report says that rising fuel prices may have a negative impact on the earnings of delivery partners. Gig workers may demand higher wages, which in turn may increase the operational expenses of companies like Swiggy and Zomato. However, the report also says that its overall impact on the total earnings of these companies is expected to remain limited in the coming time.

According to Elara Capital, the average delivery cost for quick-commerce orders is around Rs 35 to Rs 50 per order. In comparison, food delivery orders cost around Rs 55 to Rs 60 per order. The delivery cost per order for Zomato is estimated to be around Rs 45, while for Swiggy the cost is around Rs 55 per order.

Fuel is estimated to account for about 20 percent of total delivery costs; This means that approximately Rs 9 to Rs 10 per order is spent only on fuel. Given the recent 4 percent increase in fuel prices, companies may face an additional financial burden of approximately Rs 0.44 per order.

Additionally, if fuel prices increase by Rs 10 per liter in the coming months, the additional cost per order could increase to between Rs 1 and Rs 1.20. This situation can have a significant impact on the total earnings of companies.

The report also states that Swiggy is still trying to achieve break-even point (a situation where profit and loss are equal) at the contribution level in its quick-commerce business. The impact of rising costs may be more clearly visible on the company.

On the contrary, the position of ‘Eternal’ i.e. Zomato is considered quite strong. The reason for this is the company’s large customer base, high advertising revenue and better ability to recover costs from its premium customers.