Insurance Blog

Impact of petrol prices hike

As if the economic burden that the average Indian faces everyday wasn’t enough, petrol prices have been hiked – yet again.

According to the statistics, the government has hiked the petrol price by 3 times in the past 15 years. – and it’s still increasing. You might think that petroleum prices will affect only the transportation section of your budget.

Well, just a kind reminder that petroleum and its product are a fuel to almost every Industry and even a tiny streak of hike in its price will hamper you from all sides. Here are some of the common impact of the petrol price hike that you need to be prepared for. 

1.        Major Industrial Sectors

Increase the transportation cost, increase in transportation cost will increase in price of goods, and this increase in price of goods would gradually force the people to loosen their pockets even more, and like this, the avalanche effect will take place.

2.       Daily Commodities

Petrol hike directly or indirectly affects all the major sectors like transportation, textiles, auto, FMCG– because we need fuel for manufacturing & transportation! This affects the prices of daily essential commodities which are transported on a daily basis.

Banking sector is also expected to suffer due to high inflation level.

3.       Food

Food prices will face a severe hike. In both the manufacturing and the processing or cooking of the food, we need fuel, and price hike in the LPG costs doesn’t look inviting either.

4.       Inflation

Although the impact of petrol prices is almost minimal on the inflation rate, it has to be noted that other products like Diesel do have a significantly higher rate at when it comes to the inflation rate.

5.       Investments

A hike in the petrol prices is a code. Only smart people know that when decoded, it means that the government is taking, not so smart decisions. It also means that the Government is trying to sort things out, and it will be a while since your investments are back in the glamorous numbers that you want them to be.

The hike in petrol prices is going to have a severe impact on all walks of our life – a kind of a chain reaction.

Debating why the petrol prices aren’t controllable in our country, despite being the fourth largest consumer of Petroleum Products, probably wouldn’t lead us to real solutions, but rather, reminding ourselves that non-renewable energy resources are something that we don’t inherit from our fathers, but a loan we get from our children might.