Major FMCG companies have begun implementing significant price increases across their product portfolios to counter rising input costs. According to reports from ET Now, Hindustan Unilever (HUL) has implemented price increases of 2-5% across their entire portfolio, while Godrej Consumer Products has raised prices by 5% in soaps, 6-7% in detergents and 4-5% in home insecticides. Dabur has announced a 4% price hike in the upcoming quarter, with room for further increases if cost pressures persist. The company is grappling with inflation across nearly its entire product basket.
The FMCG sector is facing mounting pressure from a sharp rise in crude oil prices, which have surged close to the $115-per-barrel mark, marking a steep run-up this year. As reported by ET Now, the rally has already begun to filter into domestic markets, with the government raising petrol and diesel prices recently, the first major revision after a prolonged freeze. The increase in fuel costs has triggered a chain reaction, raising transportation expenses and squeezing margins for consumer-facing companies. Brent crude is currently trading at over $115, as the United States and Iran fail to arrive at an agreement to end the conflict, which has partially centred around the Strait of Hormuz. Barclays had warned in February 2026 that crude could cross $100 a barrel, with the conflict escalating beyond initial expectations.
The inflationary pressure has intensified with the latest fuel price adjustments, as petrol and diesel prices have risen by ₹3 per liter effective today, while CNG prices have increased by ₹2 per kilogram. According to Times of India, wholesale inflation hit an 11-month high in February, well before the recent surge in crude oil prices due to the conflict in West Asia. Food items, textiles, basic metals and non-food items were primary causes behind the inflation. Wholesale inflation rose 8.3% year-on-year in April, largely driven by higher prices of mineral oil, crude and natural gas. Retail food inflation has also edged higher, reversing earlier moderation trends and adding to concerns over household consumption.
The broader concern for the FMCG sector lies in the dual impact of rising costs and potential demand moderation. According to Times of India, economists said rising crude oil prices could now push wholesale inflation higher in the government's March data and in later months. India Ratings and Research (Ind-Ra) believes continued dependency on energy import is a key weakness for the economy, with the crisis in West Asia increasing the vulnerability of Indian economy to energy prices. A USD10/bbl increase in crude oil prices could widen the current account deficit by USD16.7 billion, increase currency weakness, and push inflation. Ind-Ra expects average inflation in base case scenario to be 4.1% compared to the earlier forecast of 3.7%, with the currency may weaken 4.5%-5.0% year-on-year in FY27.
