Oil shock bypasses petrol pumps, hits Indian businesses through raw-material costs
India’s oil shock is increasingly showing up in industrial input costs rather than at petrol pumps, with several raw materials seeing sharp price increases. IndiaMART data shows PP granules rose 32% between July and September, highlighting mounting pressure on businesses.
- Oct 3, 2026,
- Updated Oct 3, 2026 3:35 AM IST
The latest oil-price surge is beginning to show up in India’s industrial supply chain even as retail petrol and diesel prices remain largely unchanged. IndiaMART data shows sharp increases in the prices of several industrial inputs, with polypropylene (PP) granules recording the steepest rise between July and September.
According to IndiaMART’s September 2026 Marketplace Insights, the median quoted price of PP granules on its platform rose 32% to ₹125 per kg from ₹95 per kg in July. TMT steel bars increased 13% to ₹55,362 per tonne, while MS pipes and stretch film prices rose 8% each.
The data is based on prices quoted by sellers on IndiaMART and therefore provides an indication of business input-cost pressures rather than an economy-wide official price index.
Crude shock moves through the supply chain
The increase in PP prices is particularly significant because polypropylene is a petrochemical product derived from crude oil and natural gas feedstocks. Higher crude prices can therefore raise costs across plastics, packaging and other manufacturing segments.
IndiaMART founder and CEO Dinesh Agarwal said the oil shock had “landed on India’s businesses”, with inflation in industrial inputs concentrated in parts of the plastics chain.
IndiaMART’s data shows that the increase has not been uniform across all products. While PP granules rose 32%, PET bottle prices remained unchanged at ₹44 a piece. Cotton fabric prices, meanwhile, declined 8% to ₹65 per metre.
This divergence suggests that higher upstream costs have not yet uniformly translated into finished-product prices.
Petrol prices remain largely insulated
The impact on businesses is also occurring against a backdrop of relatively stable retail fuel prices. IndiaMART said crude oil prices had risen sharply, with India’s crude import basket reaching $117 a barrel on September 21.
However, petrol and diesel prices have remained largely unchanged. According to the IndiaMART graphic, oil companies have absorbed an estimated ₹8-9 per litre, amounting to around ₹530 crore a day.
That means the immediate impact of higher crude prices is being felt differently across the economy. Consumers may not see a corresponding increase at fuel stations, but manufacturers and other businesses that depend on petroleum-linked inputs can face higher procurement costs.
Industrial input prices: July vs September 2026
| Input | July price | September price | Change |
|---|---|---|---|
| PP granules | ₹95/kg | ₹125/kg | +32% |
| TMT steel bars | ₹48,975/tonne | ₹55,362/tonne | +13% |
| MS pipes | ₹63/kg | ₹68/kg | +8% |
| Stretch film | ₹158/kg | ₹170/kg | +8% |
| PET bottles | ₹44/piece | ₹44/piece | Flat |
| Cotton fabric | ₹71/metre | ₹65/metre | -8% |
Source: IndiaMART September 2026 Marketplace Insights
Margin pressure could build
IndiaMART’s data also points to broader industrial price pressures. Its September snapshot showed prices of several business inputs rising, including chemicals and rubber and plastics.
For manufacturers, the key issue is whether these higher input costs can be passed on to customers. If finished-product prices remain relatively stable while raw-material costs increase, companies could face pressure on operating margins.
The development could also eventually have implications for consumer inflation if businesses begin passing higher costs through to product prices.
IndiaMART’s findings therefore highlight a less visible channel of oil-price transmission: the shock does not have to appear at the petrol pump to affect the economy. It can travel through raw materials, manufacturing costs and supply chains before reaching businesses and, potentially, consumers.
The latest oil-price surge is beginning to show up in India’s industrial supply chain even as retail petrol and diesel prices remain largely unchanged. IndiaMART data shows sharp increases in the prices of several industrial inputs, with polypropylene (PP) granules recording the steepest rise between July and September.
According to IndiaMART’s September 2026 Marketplace Insights, the median quoted price of PP granules on its platform rose 32% to ₹125 per kg from ₹95 per kg in July. TMT steel bars increased 13% to ₹55,362 per tonne, while MS pipes and stretch film prices rose 8% each.
The data is based on prices quoted by sellers on IndiaMART and therefore provides an indication of business input-cost pressures rather than an economy-wide official price index.
Crude shock moves through the supply chain
The increase in PP prices is particularly significant because polypropylene is a petrochemical product derived from crude oil and natural gas feedstocks. Higher crude prices can therefore raise costs across plastics, packaging and other manufacturing segments.
IndiaMART founder and CEO Dinesh Agarwal said the oil shock had “landed on India’s businesses”, with inflation in industrial inputs concentrated in parts of the plastics chain.
IndiaMART’s data shows that the increase has not been uniform across all products. While PP granules rose 32%, PET bottle prices remained unchanged at ₹44 a piece. Cotton fabric prices, meanwhile, declined 8% to ₹65 per metre.
This divergence suggests that higher upstream costs have not yet uniformly translated into finished-product prices.
Petrol prices remain largely insulated
The impact on businesses is also occurring against a backdrop of relatively stable retail fuel prices. IndiaMART said crude oil prices had risen sharply, with India’s crude import basket reaching $117 a barrel on September 21.
However, petrol and diesel prices have remained largely unchanged. According to the IndiaMART graphic, oil companies have absorbed an estimated ₹8-9 per litre, amounting to around ₹530 crore a day.
That means the immediate impact of higher crude prices is being felt differently across the economy. Consumers may not see a corresponding increase at fuel stations, but manufacturers and other businesses that depend on petroleum-linked inputs can face higher procurement costs.
Industrial input prices: July vs September 2026
| Input | July price | September price | Change |
|---|---|---|---|
| PP granules | ₹95/kg | ₹125/kg | +32% |
| TMT steel bars | ₹48,975/tonne | ₹55,362/tonne | +13% |
| MS pipes | ₹63/kg | ₹68/kg | +8% |
| Stretch film | ₹158/kg | ₹170/kg | +8% |
| PET bottles | ₹44/piece | ₹44/piece | Flat |
| Cotton fabric | ₹71/metre | ₹65/metre | -8% |
Source: IndiaMART September 2026 Marketplace Insights
Margin pressure could build
IndiaMART’s data also points to broader industrial price pressures. Its September snapshot showed prices of several business inputs rising, including chemicals and rubber and plastics.
For manufacturers, the key issue is whether these higher input costs can be passed on to customers. If finished-product prices remain relatively stable while raw-material costs increase, companies could face pressure on operating margins.
The development could also eventually have implications for consumer inflation if businesses begin passing higher costs through to product prices.
IndiaMART’s findings therefore highlight a less visible channel of oil-price transmission: the shock does not have to appear at the petrol pump to affect the economy. It can travel through raw materials, manufacturing costs and supply chains before reaching businesses and, potentially, consumers.