Firms see 5-7% rise in costs

The production and distribution costs for India Inc are expected to increase 5-7 per cent because of the hike in oil prices.

However, companies are still undecided on passing the increased input costs to consumers.

"The increase in oil prices was expected given the spurt in international crude prices. Our costs will go up around three to four per cent but this being the lean season for consumer durables, we will have to absorb the increase," said Rajeev Karwal, CEO Electrolux Kelvinator.

The industry chambers said the price increase would impact the competitiveness of companies.

"The increase in the retail prices of petrol, diesel and cooking gas, which comes close on the heels of a hike in coal and power prices, is of serious concern. It will have a cascading effect, fuelling inflation in the country," said Ravi Wig, president, Punjab Haryana and Delhi Chambers of Commerce and Industry .

FMCG major Dabur India said its cost of freight and production would go up over 5 per cent. "But given the competitive environment in the FMCG sector, it is difficult to decide whether to pass it on to consumers" said C Mohan, executive director, Dabur India.