IMPACT OF FUEL PRICES

As the petrol price increased worldwide it harms other sectors of the economy. I came here to discuss the impact of fuel prices on other sectors of society.

Impact on Auto Market

The demand for Hybrid vehicles and normal vehicles of engine capacity equals or less than 1000cc will increase because they consume fewer fuels which will put upward pressure on their prices means an increase in their prices. On the other hand demand for vehicles with a bigger engine will decrease so this will put downward pressure on their prices so its prices will decrease.

Impact On Food Items

As fuel price changes it has a direct consequence on change in the price of household food items. As the price of fuel increases, the price of food items also increases due to an increase in transportation costs. Transportation cost is a direct cost that is added to the price of items. It is not negligible. As the price of food items increases, the majority of household income will be spent on food items which will leave less income to be spent on other items.

Impact On Agriculture And Industry

An increase in fuel prices has a direct consequence on agriculture and industry because transporters will charge more fare due to change in fuel price on the other hand price of agricultural products and industrial products will increase. Secondly, the fertilizer industry consumes 50-60% of natural gas means more than half of its cost component comprises gas prices. An increase of 1 rupee in gas prices will increase the cost of production of fertilizer by 0.5-0.6 rupee and vice versa

Impact On Construction Material

Fuel is being consumed by producing cement and other construction material. An increase in fuel prices directly affects the production cost of raw materials. Secondly, the transportation cost of bringing raw materials to the factory is also increased in the form of charging higher fares by transporters for bringing such materials to the factory. So an overall increase in the price of construction material is seen. This will adversely affect the property business because no one will have disposable income left to buy or construct a property.

Impact On Medicines

As fuel prices increase it will put upward pressure on the transportation cost of raw materials which is a direct cost so medicine companies will charge higher prices from consumers. As a result, the lower class people wouldn't buy medicines due to higher prices.

Impact on Health

An increase in the price of medicines will have a direct effect on health because lower class people wouldn’t have disposable income to be spent on medicine they would either spend it on food or medicine. Besides this, an increase in fuel prices will also affect the health of other classes of people too. They would get depressed and many other mental diseases

Impact on Energy Sector

The majority of the energy is produced from fuel. An increase in the prices of fuels will have a direct effect on the cost of production of energy which will put upward pressure on its prices.

Law and Order

An increase in fuel prices would give rise to inflation due to which people will go on strikes and lockdowns, on the other hand, this would also pressurize the poor people to do robbery, mobile snatching and other illegal activities. Many people will do suicide which will give rise to an imbalance in society.

Impact on Economy

Fuel prices are a direct factor of inflation in the economy. An increase in fuel prices also causes inflation in the economy because there is no sector in the economy which doesn’t use fuel. Every sector uses fuels directly or indirectly.

Overall an increase in fuel price will affect society adversely and vice versa.

Hope you find this blog helpful. Thanks for reading