Fuel price impact: Daily use items like soap, shampoo, biscuits to become 5-8% more expensive
If the hike in fuel prices has weighed on your wallet, then you should brace for another bad news. Consumers in India will soon have to shell out more on daily use products.
If the hike in fuel prices has weighed on your wallet, then you should brace for another bad news. Consumers in India will soon have to shell out more on daily use products. The prices of FMCG products are likely to increase by about 5-8 per cent starting next month.
According to a report in The Economic Times, some companies have already increased prices in line with various inflationary pressures such as spike in petrol and diesel prices. The hike in minimum support price (MSP) for farmers, and upwards movement in commodity prices will also lead to revision in MRP of some products, it said.
"The environment is inflationary, and it is not possible to hold on to prices going forward. We will have to increase prices by 5% to begin with, to offset multiple pressures... we will try to balance value and volume growth," Varun Berry, managing director of Britannia Industries told the daily.
Fuel prices spiked to a record high on Friday morning. A litre of petrol is retailing at Rs 79.99 in the national capital while the same is selling for Rs 87.39 in the financial hub of Mumbai. The fall in value of Indian rupee against the US dollar has further worsened the outlook as India imports most of its crude.
Petrol derivatives, key inputs for FMCG firms, have also been affected by rise in international crude oil prices. They are used in packaging material like bottles and boxes.
"We will take price increases of about 7-8%. The impact of MSP itself has been in the range of 10-12%, but we are not passing the entire cost escalation and taking some hit on the bottomline too," B Krishna Rao, senior category head at Parle Products, told the newspaper.
A recent report by Jefferies suggests that consumer goods giant Hindustan Unilever has taken price hikes in detergents, skin care and select soap brands in the 5-7% range last month. Parachute hair oil and Saffola edible oil maker Marico undertook a price increase in its value added hair oil portfolio by 7% while oral care maker Colgate Palmolive increased prices in some of its brands by 4% last month.
Adding to woes of the common man is the never-ending fall in value of Indian rupee against the US dollar. On Thursday, the domestic currency breached the 72 mark against the US dollar for the first time ever.
Carmakers, dependent on imports of parts, are likely to pass on the costs to car buyers. Electric appliances like laptops, TVs, etc. are also likely to turn dearer in the coming days. Mobile phones, for which components come from outside India, may see a price hike ahead of the festive season. Some consumer durable companies like LG, Haier, and Godrej Appliances have already hiked prices by 3-5 per cent this month. Executives at Chinese smartphone major Xiaomi have already hinted at a price hike if rupee continues its losing streak against the greenback.