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Petrol-Diesel Price Latest Update: The effect of the long-running tension in the Middle East is clearly visible in many countries of the world including India. This is the reason why the prices of petrol and diesel are continuously increasing in India also. Rating agency CRISIL has also expressed serious concerns about fuel in its report. The agency has said that due to increase in the prices of petrol and diesel, India’s economy may face new inflationary pressure. The increased costs of transportation and production may directly impact consumers in the coming months.

According to the report, oil marketing companies are trying to reduce their losses gradually. In such a situation, the total increase in the prices of petrol and diesel is likely to reach around Rs 10 per liter.

The effect will be visible on the entire economy

Crisil has said that the impact of rising prices will be visible in the form of increase in transportation costs across the economy, which may lead to increase in both food items and core inflation. The direct impact of increased fuel prices on Consumer Price Index (CPI) inflation is estimated to be around 36 basis points. If the total increase reaches Rs 10 per litre, the impact could increase to around 48 basis points.

Petrol and diesel prices increased 4 times in May

• On May 15, petrol and diesel became costlier by Rs 3 per litre.
• On May 19, prices increased by 90 paise.
• On May 23, petrol became costlier by 87 paise and diesel by 91 paise.
• On May 25, petrol rose by Rs 2.61 and diesel by Rs 2.71.

Highest burden on transport sector

It is noteworthy that about 71 percent of the freight transportation in India is done through road transport. About 42 percent of fuel is consumed in this sector. In such petrol-diesel If prices increase, the cost of freight and logistics will increase rapidly and the supply chain will be affected. The biggest impact of increase in transportation cost will be on those things which are dependent on logistics – like dairy products, coffee, tea, fruits, spices, pulses, eggs and meat and fish.

Pressure on core inflation will also increase

According to CRISIL, core inflation But pressure may also increase as companies will have to face rising costs of crude oil, gas and transport. Along with this, there is a possibility of increase in prices in sectors like clothes, electronics, wood, cement and ceramics. In case of stable demand, companies can either increase prices or adopt a strategy like shrinkflation, in which prices are kept stable by reducing the size of the product.

Crude oil prices spoiled the game

The average price of crude oil in the first two months was about $112 per barrel, much higher than the estimated $95. Due to this there is pressure on inflation. The ongoing crisis in the Middle East has also affected crude oil prices. There is a continuous rise in the prices of crude oil in the global oil market, forcing the oil companies to increase the prices.