How does crude oil prices impact other sectors?
A surge in crude oil prices put pressure on the margins of oil and gas marketers due to high input costs. State-run oil marketers are unable to increase retail prices in line with global prices, which impacts their profits and subsequently share prices.
For the paint sector, crude oil derivatives account for around 25%-30% of the raw material cost of paint companies. A fall in crude oil prices eases the input cost and narrow their margins.
Tyre maker company's margin also depend on crude oil, as it is a source of synthetic rubber and other petrochemicals. A decline in crude prices decreases the raw material costs for tyre manufacturers.
And, upstream companies take a hit when oil prices fall since the price at which they sell oil is determined by the market, but their costs of production are largely fixed. If it costs more to produce a barrel of oil than it would fetch on the market, producers will incur losses.
India's oil and gas sector include state-owned