Crisil has warned that rising diesel prices could significantly increase freight and logistics costs across India, with freight rates potentially needing a 2.8 per cent hike for every ₹5 increase in diesel prices. The report highlighted the heavy dependence of India’s road transport sector on diesel, which accounts for a major share of operating expenses for fleet operators.
According to the ratings agency, fuel costs contribute nearly 40 per cent of total operating expenses for trucking companies, making transporters highly vulnerable to fluctuations in diesel prices. Sustained increases in fuel costs could force logistics operators to revise freight charges to maintain profitability and offset margin pressures.
Higher freight rates are expected to impact supply chains across sectors including manufacturing, agriculture, retail, and exports, potentially increasing overall transportation and distribution costs. Industry experts noted that elevated logistics expenses could also add inflationary pressure on consumer goods and industrial inputs if diesel prices continue to rise.