The recent increase in petrol and diesel prices could soon affect household budgets beyond fuel expenses, as transport companies across India begin transferring higher operating costs to businesses and consumers.

In a fresh advisory released this week, the All India Transporters’ Welfare Association (AITWA) said surging diesel rates have made transport operations increasingly difficult to sustain financially. The group attributed the sharp rise in fuel costs to the ongoing tensions in West Asia and disruptions linked to the Strait of Hormuz, a crucial global oil route.

To manage the mounting burden, the association has implemented a nationwide Fuel Adjustment Factor (FAF) from May 20. Under this mechanism, transport operators will revise freight charges whenever diesel prices rise.

This development is expected to affect a wide range of sectors including FMCG, retail, e-commerce, food distribution and manufacturing, since most goods in India are transported by road before reaching consumers.

According to the association, fuel alone contributes nearly 65 per cent of a truck’s total operating expenses. Under the newly announced formula, every Re 1 increase in diesel prices beyond the May 15 benchmark will result in a 0.65 per cent increase in freight rates.

Transporters estimate that if diesel prices rise by Rs 5, freight costs could increase by over 3 per cent. A Rs 10 hike may push logistics expenses up by around 6.5 per cent, while a Rs 15 jump could lead to nearly 10 per cent higher transport charges.

The association clarified that the surcharge is not aimed at boosting profits but is intended purely to offset rising fuel and operational costs.

Transport industry representatives argue that the current situation is more severe than routine fuel price fluctuations. Apart from expensive diesel, operators are also dealing with fuel shortages, higher toll charges, increasing labour costs, costlier tyres and a sharp jump in prices of DEF or AdBlue fluid used in BS6 commercial vehicles.

These combined pressures, transporters say, have significantly raised the cost of moving goods across the country.

Since India’s supply chain depends heavily on trucking networks, higher freight charges are likely to impact the prices of vegetables, groceries, medicines, packaged products, electronics and even food delivery services.

Experts believe logistics-driven inflation often begins gradually before becoming visible in retail markets. Businesses facing increased transport expenses may eventually pass a portion of the additional cost to consumers.

The transport body has also urged the government and industries to introduce a structured fuel-linked freight pricing model, arguing that freight contracts often remain fixed despite frequent changes in diesel prices, forcing operators to absorb heavy losses.

The latest move by transporters reflects growing concerns that rising global crude oil prices and regional geopolitical tensions are beginning to influence India’s wider economy. With fuel costs, logistics expenses and inflationary pressures all climbing together, consumers may soon feel the impact far beyond petrol pumps.