New Delhi | Mumbai: India Inc executives have red-flagged further inflation and supply disruptions as Russia has launched a major military assault on Ukraine and crude oil prices have topped $105 a barrel.
A steep surge in crude oil prices would impact household budgets since crude oil-related products have a share of close to 10% in the Wholesale Price Index (WPI) basket, executives said.
“Oil prices crossing $100 is a matter of huge concern and there is lot of uncertainty on how the situation will move forward,” said Harsh Agarwal, director at edible oils maker Emami.
Analysts said oil prices are likely to remain elevated for several months as the US and many other countries are announcing fresh sanctions on Russia, which accounts for 11% of global crude-oil exports. Brent crude on Thursday rose above $105 a barrel for the first time since 2014.
“There will further be inflationary impact in the short term,” said Saugata Gupta, managing director of hair oils and health foods maker Marico. “Organisations have to absorb some of the cost push through more aggressive optimisation measures and partially pass the balance to consumers.”
Sushil Kumar Bajpai, president at RSPL Group, said the crisis will touch every aspect of Ghari detergent maker’s operations – “from inflating input costs due to high dependence of crude oil derivatives, a key ingredient in soaps and detergents, to distribution and packaging costs after an expected rise in fuel prices”.
“This will also impact demand as consumers will see pressure on their daily budgets due to increasing prices across products,” he said.
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