Markets are not fully pricing in fuel-led inflation yet, say analysts

Retail prices of petrol and diesel had been on a freeze since October 2021 when crude oil prices were hovering around $80 a barrel

Markets are not fully factoring in the impact of fuel price-led inflation at the current levels, believe analysts, who see up to 8 – 10 per cent correction in frontline indices once the inflationary pressures kick in.

After a hike of Rs 25 per litre in diesel prices for bulk buyers over the weekend, the government has raised petrol and diesel prices by 80 paise a litre each, while domestic cooking gas (LPG) prices were increased by Rs 50 per cylinder, ending over four-and-half month election-related hiatus in rate revision amid rising crude oil prices.

“The market is