New Delhi: New Delhi: A sharp rise in global crude oil prices is likely to drive up paint prices in India, as petroleum-derived inputs form a significant portion of the industry’s raw material basket.
Crude prices have recently climbed close to the $100 per barrel mark, driven by geopolitical tensions in the Middle East and fears of supply disruptions. The rally has raised concerns across several oil-sensitive sectors, including paints, aviation and chemicals.
For paint manufacturers, the impact is particularly significant because many key inputs—such as solvents, resins and other petrochemical derivatives—are linked directly to crude oil. Industry estimates suggest that crude-based derivatives account for roughly 25–60% of the raw materials used in paint production, making costs highly sensitive to oil price fluctuations.
As crude prices rise, the cost of these inputs increases, squeezing profit margins for companies. Analysts say paint makers may either absorb part of the increase or pass it on to consumers through price hikes, especially if the rally persists.
Stocks of major paint companies such as Asian Paints, Berger Paints and Kansai Nerolac have already faced pressure in recent trading sessions as investors factor in higher input costs and potential margin compression.
The sector typically takes three to six months to pass on rising raw material costs to customers, meaning retail paint prices could gradually rise if crude remains elevated.
India’s paint industry—dominated by decorative paints used in housing and renovation—could see moderate demand disruption if prices increase sharply. However, companies with strong brands and distribution networks may still manage to offset higher costs through selective price hikes and product mix adjustments.