Baby Care Consumers Still Waiting for Price Benefits due to Petroleum Price Cuts


Published Date : Apr 13, 2015

Consumer goods such as diapers and baby care products became a bit more dear in the middle of the 2008-09 global economic recession, due to the increase in energy costs, particularly crude oil and it several petroleum derivates. Petroleum products are extensively used in numerous baby care products, including the ones used heavily in day-to-day life such as disposable diapers, which led to the energy price hike directly impacting prices of baby care products. In addition to components that use petroleum products, petroleum fuels are also used to power factories that manufacture baby care products. This is a massive chunk of the operational costs of the manufacturers and translates directly to a higher price tag for the consumers.

However, fast forward to 2015, and the world is well on its way to a robust recovery from the lingering aftereffects of the depression and crude oil prices are down. In fact, last year saw crude oil prices hit record lows as prices fell to less than US$50 per barrel, adversely impacting several oil-dependent economies such as Russia significantly. The expected effect of the oil price drop on the consumer goods, however, hasn’t materialized, and experts predict that this trend is here to stay.

Market experts have stated that consumer goods manufacturers have opted to keep the profit margins high for themselves in the current scenario, thanks to the lack of competitive pressure to lower prices and pass on the financial benefits to the consumer. Air fares have also stuck to high marks despite the rapid depreciation of aircraft fuel prices. Experts predict a bleak outlook for the consumers, stating that prices of consumer goods are not expected to drop anytime soon, and the best the average consumer can hope for is a lasting flatline in prices and lower rates of price increment.