New Delhi: Fuel prices in India are at their highest levels, with many states selling one-litre petrol at above Rs 100. In Mumbai, the per litre petrol prices recently cross the Rs 100 mark.
Besides the financial capital, petrol is selling at above Rs 100 in several other cities of Rajasthan, Madhya Pradesh, Maharashtra, Leh, Andhra Pradesh and Telangana. Likewise, the prices of diesel in India are touching the skies.
The daily smaller revisions in the prices of petrol and diesel have resulted in a snowball effect, which is making a dent in the pockets of the common man.
We have listed a few things here that are directly impacting your monthly budgets due to the recent price hike:
1. Rise in the prices of essential commodities
The prices of essential commodities such as edible oils such as mustard, groundnut and soyabean, among others, have increased by more than 2x in several regions in a few Indian states.
In Rajasthan, where the fuel prices have been hiked the most, mustard oil used for cooking has been more than doubled from Rs 90-100 per litre in May last year to around Rs 180-190 per litre.
However, there are several other factors deciding the prices of essential commodities. The good news is that India is considering reducing the import tax on edible oil to give a major respite to citizens.
2. Hike in the prices of vegetables, fruits and other perishable items
The rise in petrol prices is leading to a hike in transportation costs of perishable items such as vegetables and fruits from farms to a mandi near you. Since diesel is used by around 65% of vehicles involved in the transportation of perishables, you can expect the prices of vegetables and fruits to increase soon.
3. Fuel price hike may impact interest rates
Yes, you read that right. A rise in fuel prices has an impact on the interest rates offered by banks. The rising inflation rate may eventually force the Reserve Bank of India to consider increasing interest rates, which have been remained unchanged in the last monetary policy committee meeting.
In an earlier interview with Mint, chief economist at CARE Ratings Madan Sabnavis had said that “anyone thinking of taking a loan will get affected. On the positive side, savers will benefit from higher rates.”
4. Rates of courier services may increase
The fuel price hike is all set to impact companies in the shipping business. Harsh Vaidya, Founder and CEO, WareIQ said “So far, we didn’t see a direct impact of hiked petrol prices, especially with our current and ongoing service providers as their pricing has remained the same. But in the past couple of days, we definitely saw a spike in fuel surcharge from our courier partners which will be applicable to us.”
5. Imports may get expensive
The prices of imported products may increase with the recent petrol and diesel price hike. The rising rates of crude oil also negatively impact the Indian currency.