Rising petrol and diesel prices may soon make food delivery more expensive. Fuel cost pressure could impact Swiggy and Zomato delivery charges and profits.
Fuel Price Surge May Impact Food Delivery Costs
The recent rise in petrol and diesel prices could soon affect customers ordering food online through platforms like Swiggy and Zomato. According to a report by Elara Capital, increasing fuel costs are expected to put pressure on food delivery and quick commerce companies in the coming months.
The report states that fuel prices have increased by nearly Rs 4 per litre due to rising crude oil prices and ongoing geopolitical tensions. As a result, petrol and diesel rates have gone up by around 4 percent, increasing operational expenses for delivery platforms.
Gig Workers May Demand Higher Payments
Higher fuel prices are likely to affect delivery partners directly, as daily commuting and delivery expenses rise. Industry experts believe gig workers may demand better payouts to offset the increasing fuel burden.
While this could increase operational costs for companies, analysts expect the overall financial impact to remain manageable. However, firms may either absorb a part of the additional cost or pass some of the burden on to customers through higher delivery charges.
Elara Capital noted that any increase in fuel prices directly affects delivery economics and may create pressure on payment structures for delivery workers.
Average Delivery Cost Could Increase
The report estimates that the average delivery cost for quick commerce platforms currently ranges between Rs 35 and Rs 50 per order. For food delivery services, the average delivery cost is estimated at around Rs 55 to Rs 60 per order.
| Platform Type | Estimated Delivery Cost Per Order |
|---|---|
| Quick Commerce | Rs 35 – Rs 50 |
| Food Delivery | Rs 55 – Rs 60 |
| Zomato Average | Around Rs 45 |
| Swiggy Average | Around Rs 55 |
Analysts estimate that fuel accounts for nearly 20 percent of delivery expenses. This means the fuel cost per order is currently around Rs 9 to Rs 10.
With the recent 4 percent increase in fuel prices, the negative impact per order is expected to be around Rs 0.44.
Bigger Fuel Hike Could Hit Company Earnings
The report also highlighted a worst-case scenario where fuel prices rise by Rs 10 per litre in the coming months instead of the current Rs 4 increase.
If that happens, the additional burden per order may rise to around Rs 1 to Rs 1.2. This could significantly impact profitability for food delivery companies.
According to estimates, such a rise may affect Eternal’s FY27 adjusted EBITDA by nearly 4 to 5 percent, while Swiggy could face an impact of around 10 to 12 percent.
Customers May Soon Pay Higher Delivery Charges
As operational expenses continue to rise, companies may revise delivery fees or introduce additional convenience charges to maintain profitability. Customers using food delivery apps regularly may soon notice slightly higher order costs, especially during peak hours or long-distance deliveries.
Despite the pressure, analysts believe the sector remains financially stable and capable of managing moderate fuel price fluctuations.
FAQ
Why could Swiggy and Zomato orders become expensive?
Rising petrol and diesel prices are increasing delivery costs, which may lead companies to raise delivery charges.
How much have fuel prices increased recently?
Petrol and diesel prices have increased by nearly Rs 4 per litre, according to recent reports.
Will the fuel price hike affect delivery workers?
Yes, delivery partners may demand higher payouts due to increased fuel expenses.