Commodity prices in India, especially fuel, have surged in recent weeks as global energy costs have risen due to supply concerns following Russia's invasion of Ukraine and rising demand following the COVID-19 outbreak. In the last two weeks, petrol prices in Delhi have risen by Rs 8.40, while CNG rates have risen by around Rs 6.5 per kilogram after seven rises.
After Russian President Vladimir Putin approved a special military operation in Ukraine's Donbas area on February 24, Brent crude oil prices hit USD 100 per barrel for the first time since 2014.
In the days after, US West Texas Intermediate crude futures soared to a high of USD 130.50 a barrel, the highest since July 2008, before falling back. Brent also reached a new high of USD 139.13, matching its previous high in July 2008.
Brent crude futures declined USD 1.01, or 1%, to USD 103.38 a barrel by 2223 GMT on Monday. WTI crude futures dropped 84 cents, or 0.9%, to USD 98.43 a barrel.
The rise in global crude oil prices as a result of the Russia-Ukraine conflict has had an influence on India's household budget, with recent increases in fuel and diesel costs, as well as more expensive vegetables and power.
In the last two weeks, petrol prices in Delhi have risen by Rs 8.40, while CNG rates have risen by around Rs 6.5 per kilogram after seven rises. Aside from that, greater transportation expenses have pushed up the pricing of numerous commodities due to higher diesel rates, which have risen to Rs 95.07 per liter.
Lemon prices in Rajkot, Gujarat, have recently risen to Rs 200 per kg. "The price of a kilogram of lemon is approaching Rs 200." Previously, it was roughly Rs 50-60 per kg. This has an impact on our 'kitchen budget.' "I don't know when the costs would go down," a customer at a market told news agency ANI.
Aside from that, milk costs have also risen in recent weeks. Due to higher input costs, companies including Amul, Parag, and Verka upped their milk prices by Rs 2 last month. According to Jayen Mehta, chief operating officer of Gujarat Cooperative Milk Marketing Federation (GCMMF), a marketer of Amul milk and milk products, "this price hike is being done due to growth in the cost of energy, packaging, logistics, and calf feeding costs."
Cumin, coriander, and chili prices have also risen by 40-60% in recent days, according to a Krishi Jagran study. According to online travel agencies, higher global prices have increased the cost of flight travel by nearly 30% in the last month.
In terms of domestic gas pricing, the rating agency stated that city gas distribution corporations may be forced to pass on price increases in stages, resulting in a lag incomplete cost pass-through, and, as a result, margin pressure.
The RBI is expected to re-evaluate its prediction for CPI inflation in the upcoming policy meeting, according to a research note from Japanese brokerage Nomura. "However, the RBI is likely to emphasize that inflationary pressures are only temporary and that inflation will remain below the 6% upper-bound," the report said.
