Crude oil spike could pinch FMCGs hard; operating margins likely to suffer

Operating margins are likely to suffer as crude-linked derivatives act as key inputs for consumer goods companies

Your favourite toothpaste or detergent bar could cost more if crude oil prices continue to rally the way they have in the past month. Between March 9 and now, crude oil has spiked to levels of about $72 a barrel, a jump of 10 per cent. The expectation is that it could cross the $75-mark in the near term as geopolitical issues (the on-going war of words between the US and Russia), and a demand-supply mismatch push up prices, analysts tracking the market said.

Among companies that are affected significantly because of rising crude prices are fast-moving consumer goods (FMCG)