Why fuel prices shouldn't affect food prices
The recent fuel price hike should have an impact on food prices, considering the increase in transportation costs. But in India the impact would not be substantial as the short road distances travelled by India’s food would now be a blessing. Since carbs, fats, sugar, milk and greens clock barely a few hundred food miles, diesel price hike may leave MRPs untouched for now.
ET states that Household food budgets will begin to feel the real pinch only around Diwali after farmers use more expensive diesel to water fields in the coming kharif and raise farm-gate prices. Meanwhile, if the consumer is asked to pay significantly more for basic food items, it may be more due to profiteering and the market’s inflation expectations rather than any major rise in actual cost.