The recent rise in fuel prices could increase operating costs for food delivery and quick commerce companies like Swiggy and Eternal in the short term, according to a report by Elara Capital.
However, the report says the overall financial impact is expected to remain manageable for now.
Petrol and diesel prices have reportedly increased by around Rs 4 per litre due to rising crude oil prices and ongoing geopolitical tensions.
This could put pressure on delivery operations, especially for companies that depend heavily on gig workers and last-mile deliveries.
Why Fuel Prices Matter for Delivery Companies
Fuel is one of the biggest expenses in the delivery business.
Every time fuel prices rise:
Delivery partner earnings get affected
Companies may face pressure to increase payouts
Operating costs per order go up
According to Elara Capital:
Quick commerce delivery costs range between Rs 35–50 per order
Food delivery costs range between Rs 55–60 per order
The report estimates:
Eternal spends around Rs 45 per order
Swiggy spends around Rs 55 per order
Since fuel makes up nearly 20% of delivery costs, even a small increase in petrol and diesel prices can impact company finances.
How Much Extra Cost Could Companies Face?
Elara Capital estimates that the current fuel price hike may increase delivery costs by around:
Rs 0.44 per order on average
That may look small, but for companies handling millions of deliveries daily, the total impact can become significant over time.
The report also warned about a possible worst-case scenario.
If fuel prices rise further — from the current Rs 4 per litre increase to around Rs 10 per litre — the additional cost could reach:
Rs 1 to Rs 1.2 per order
This could affect profitability in the coming years if companies fail to pass the extra cost to customers.
Swiggy May Face Bigger Pressure Than Eternal
According to the report, Swiggy could face a bigger financial impact compared to Eternal.
Why?
Because Swiggy is still working toward profitability in the quick commerce business.
Meanwhile, Eternal is seen as being in a stronger position due to:
Larger operational scale
Higher advertising revenue
Premium customer base
Better pricing flexibility
Experts believe Eternal may recover rising costs more easily than competitors.
Customers May Also Feel the Impact
The report suggests the rising costs may eventually be shared among:
Customers through higher delivery charges
Platforms through lower margins
Delivery partners through earnings pressure
This means users could see:
Higher convenience fees
Increased delivery charges
Surge pricing during peak hours
At the same time, delivery workers may demand better payouts to offset rising fuel expenses.
Quick Commerce Industry Still Growing Fast
Despite cost pressures, the quick commerce and food delivery market in India continues to grow rapidly.
Elara Capital estimates that by FY27:
Eternal could handle around 2.7 billion orders
Swiggy could process around 1.4 billion orders
The industry remains heavily dependent on efficient delivery systems and stable fuel costs to maintain profitability.
Bigger Challenge Ahead for Delivery Platforms
Rising fuel prices have once again highlighted how sensitive app-based delivery businesses are to operational costs.
As competition increases in India’s food delivery and quick commerce market, companies may now have to carefully balance:
Customer pricing
Delivery partner payouts
Profit margins
Expansion plans
The coming months could become crucial for how these platforms manage growth while dealing with rising costs.
