Capital market analysts say that rapidly rising oil prices can but worsen the image of listed companies, as far as foreign investors are concerned. “For the market, a steady increase in oil prices will later translate into higher inflation and, implicitly, to higher company costs,” brokerage company CA IB Securities’ head of Analysis Department, Adriana Marin, told Business Standard.
As far as inflation is concerned, ING Bank Analyst Nicolae Chidesiuc said that if oil prices continue to rise as they have recently “there will be serious problems for the 2009 [inflation] target.” Raiffeisen Bank Analyst Ionut Dumitru says that “a 10 percent increase in fuel prices will lead to 0.5 percent higher inflation.”
The first impact will be a rise in the price of consumer gas prices. LukOil representatives have already announced a RON 0.07 (€0.019) increase in prices per liter.
Construction work will also be hit by higher oil prices, according to independent analyst Aurelian Dochia. “The 30 percent growth rates registered in recent years will decline significantly,” he said.
