India’s aam aadmi may feel the brunt of the Russia-Ukraine crisis as basic commodity prices rise.

The global economy is on the edge as tensions rise between Russia and Ukraine. From natural gas to wheat, experts see prices rising for everything from natural gas to wheat in the near future.

The following may be affected in the coming days:

Natural gas prices rise
The Ukraine-Russia crisis has pushed Brent to $96.7 a barrel, its highest level since September 2014.

Russia is one of the largest oil producers. The current crisis could cause prices to surge above $100 a barrel in the coming days. Rising crude oil prices will affect global GDP.

A JPMorgan analysis found that a rise in oil prices to $150 a barrel would reduce global GDP growth by just 0.9%.

Crude oil-related products directly account for more than 9% of the Wholesale Price Index (WPI) basket. Therefore, higher Brent crude oil prices will add about 0.9% to India’s WPI inflation.

According to experts, if Russia goes to war with Ukraine, the price of domestic gas (CNG, PNG, electricity) could increase tenfold.

LPG to increase kerosene subsidies
Higher crude oil prices are expected to increase subsidies for LPG and kerosene.

Gasoline, diesel prices to rise
Historically, high oil prices have led to higher gasoline and diesel prices across India. Fuel prices in the country hit a record high in 2021.

Petrol and diesel prices in India could soar if the Russia-Ukraine crisis continues.

Oil accounts for about 25% of India’s total imports. India imports more than 80% of its oil needs. Higher oil prices will affect the current account deficit.

Wheat prices may rise
If food supplies in the Black Sea region are disrupted, experts fear it could have a major impact on prices and fuel food inflation.

Russia is the world’s largest wheat exporter, while Ukraine is the fourth largest. The two countries account for nearly a quarter of total world wheat exports.

According to a recent United Nations report, food prices have risen to their highest levels in more than a decade, largely due to the impact of the pandemic on supply chains.

Energy and food prices are likely to see sharp swings in the coming days. The resulting investor sentiment could jeopardize investment and growth in global economies.

Metal prices rise
Palladium, a metal used in car exhaust systems and mobile phones, has surged in price in recent weeks amid fears of sanctions against Russia. The country is the world’s largest exporter of palladium.

Complete News Source : India Today