Inflation will rise in India after Russia invades Ukraine, find out which items will become more expensive

Russia and Ukraine are currently at war in the world, which has pushed up crude oil prices. Crude oil prices hit a 14-year high in US trade on Thursday. Oil reached $116.57 a barrel, the highest level since September 22, 2008. The Russia-Ukraine crisis has pushed up not only crude oil but also edible oil, food and gas prices. The effects are already being felt in India and inflation is likely to spiral out of control in the near future.

One week of fighting in Ukraine has shaken the world economy. Western sanctions have left Russia isolated in the world, hitting its currency and economic assets hard, and pushing up energy and food prices. Russia is the 11th largest economy in the world with 1.5 trillion, according to the World Bank. Russia has huge reserves of oil and gas, which has led to a huge increase in crude oil due to fears of supply disruptions.

Crude oil reached 20 percent

Crude oil prices have risen by 20 percent since the conflict began in Ukraine. Natural gas prices have skyrocketed in Europe. Oil prices have more than doubled since last Friday. The rise in crude oil prices has led to a sharp rise in petrol and diesel prices worldwide. This will increase inflation in India. Travel and cooking will also be expensive. Inflation in the world could put a brake on economic growth. According to a report, India in Asia could be most affected. India imports 80 per cent of its crude oil from other countries.

At present, the retail price of petrol and diesel in the country corresponds to $ 82-83 per barrel of crude oil. In India, there has been no change in petrol and diesel prices since Diwali. As a result, oil companies are suffering huge losses every day. Petrol and diesel prices may go up by Rs 15 after Assembly elections. If the price of crude oil goes up by one dollar per barrel, then the price of petrol in the country goes up by 50 paise. In Delhi, petrol is currently priced at Rs 95.41 and diesel at Rs 86.67 per liter.

Inflation erupts

Rising crude oil prices will hit cement, airlines, paint makers, FMCG and the automotive sector hard. Electricity and fuel costs account for 25 to 30 per cent of the total operating costs of cement companies. Similarly, aviation fuel price hike will also hit airlines. Crude oil is widely used in paints. Similarly, expensive packaging and transportation will increase the cost of FMCG companies. Oil prices will also affect the automotive sector. This means that rising oil prices will hit inflation hard.

Gas prices in India could double from April

The world is currently experiencing a severe gas shortage and its effects could be felt in India in April. This could double the country's gas prices. Naturally, CNG, PNG and electricity prices may go up in India. Domestic industries are already paying higher prices for LNG in imports. This is due to long term contracts where the price is related to crude oil. But the real effect will be seen in April when the government changes the domestic price of natural gas.

Electronic goods and vehicles will be expensive

According to a report by market research group Techce, the world's chip industry is heavily dependent on Russia and Ukraine for C4F6, neon and palladium. They are widely used to make semiconductors. For example, 90% of the neon used in the US semiconductor industry comes from Ukraine. Russia is the largest supplier of palladium. The world is already struggling with a shortage of semiconductors. Semiconductors are also used in many industries, including autos and electronics vehicles.

Fertilizer will be expensive

Russia produces two-thirds of the world's ammonium nitrate. Russia is the world's largest exporter. Crop production will become more expensive worldwide as its supply is disrupted. This is expected to increase food inflation. In the United States, food inflation has reached 6 percent. India is the largest importer of chemical fertilizers from Ukraine. Disruption of its supply could lead to shortage of fertilizer in the country. Not only that, most of the composting plants have now turned to gas instead of coal. Gas is supplied from Ukraine.

Metals will also become more expensive

Russia has 10 percent copper reserves. Also, it has reserves of 6 per cent aluminum and nickel. Aluminum is used in car manufacturing, while nickel is required for electric car batteries. Both these metals are at the peak of the decade. Russia is the world's second largest producer of platinum and is used in many industries.