Web Analytics Business News This Week Will Rise in Oil Price Weigh High on Food Inflation? | Business News This Week

Feb 5, 2010

Will Rise in Oil Price Weigh High on Food Inflation?

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Business News : The food inflation is the major concern the Indian economy is facing. There is not  rise in the fuel prices (petrol and diesel prices) in India for around last six months. The price of petrol and diesel may rise any time, provided the government think there is need for it. There is close connection between the fuel prices and food inflation.

Any rise in the fuel prices will have high impact on the food inflation. As the supply of goods depends on the road transportation and less on rail transportation. The rise in fuel price would add extra cost to transporting cost. The transportation of essential commodities by businessmen would not bear  the extra cost but they simply pass it on to the consumers. It is the consumers those bear the ultimate price rise, simply the rise in fuel prices would increase prices of goods and services in an economy.


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