How does Russia-Ukraine war increase petrol, diesel & gold prices? Does it affect India?

Since Russian President Vladimir Putin announced an attack on Ukraine, the world markets have taken a hit. The Russia-Ukraine tension has caused fear amongst the general public as they are pondering about the price rise which might happen due to the war. Will fuel price go up? If so, how will it affect India?

Rise of crude oil price globally

Globally, oil and gold prices started soaring up after the announcement of the Russian President to attack Ukraine on their eastern border. Brent crude oil futures rose by nearly 7% and the commodity is currently trading at more than $103 per barrel.

Russia contributes a lot to crude oil export and their invasion of Ukraine might call up for sanctions from different countries and that will further fire up the rising crude oil prices. Brent crude oil is trading at over $100 per barrel for the first time since September 2014. Brent crude price has risen by over 18% from last month, as the crude oil was trading close to $76 per barrel.

The rise in crude oil price will directly affect the Indian budget as the prices of petrol and diesel might fire up soon. The rise in the price of petrol and diesel will eventually affect the markets which are directly or indirectly dependent on the fuel. Prices of vegetables, fruits and other commodities might rise in India as transportation is dependent on petrol and diesel.

Precious metals soar up

Indian market too saw the effect of the ongoing war as the market crashed in the opening hours of Thursday. Sensex was down by more than 1400 points where Nifty 50 tumbled by more than 2.5%. The major reason for the crash was the fear amongst the investors as they started dumping their holdings.

Many investors saw gold as a haven for investing during the war, which resulted in a rise in the price of gold. The precious metal is currently trading at more than $1946 per ounce (1 ounce= 28.3 gm). The price of gold has risen by more than 2% today, which is close to $40 per ounce. Silver has also seen a sharp rise since the announcement of the war and has risen by close to 3% and trading at close to $25 per ounce.