Thread by @finologyticker

Few industries that may get affected due to an increase in OIL prices🛢️

• Cement
• Airlines
• Paint manufacturers
• FMCG
• Auto

But ‘How’🤔

Let's find out in this thread🧵

#RussiaUkraineWar #CrudeOil

India relies on other countries for more than 80% of its crude oil requirements🤯

As oil prices breached $100/ barrel for the first time since 2014, it is perhaps India’s biggest macroeconomic challenge.

#stockmarketcrash #Inflation

Effect on some sectors and why⤵️

• Cement - Because power and fuel expenses account for 25-30% of the sector's total operating cost.

• Airline - Because aviation turbine fuel accounts for a big share of its operating cost.

• Paint - Because oil is a major raw material.

• FMCG - Because packaging and transport will get expensive.

• Auto - Because of the need to fuel to run vehicles.

Add more sectors⤵️

Apart from this what's at stake is:

1. GDP growth: every 10% ⬆ in crude oil price, will shave off around 0.2 % from the GDP growth & widen the current account by 0.3 %.

2. Inflation: increase in freight movement ➡️ food items like vegetables, fruits, pulses, oil, etc. are all likely to be expensive.

⚠ If inflation rises, it will increase beyond the RBIs projected figures & the central bank will then be forced to increase the rates. 🤯

➡Impact on the exchange rate:

If war continues, the exchange rate will also be affected as the rupee may depreciate further.

⚠India's total trade spending will also increase due to the impact on the exchange rate.

What is India's stand on Russia-Ukraine dispute?

India currently has a neutral stand on the Russia-Ukraine dispute and has appealed to both countries to exercise restraint.

However, it is clear this will negatively impact India and its economy.

What is your opinion on the Russia Ukraine crisis?⤵

#StockMarket #RussiaUkraineWar