Question

What type of inflation is caused by rise in price of crude oil?

Answer 1

In this perspective, an increase in the price of crude oil appears to increase inflation through the reduced supply of the many consumer goods using oil as an input. But appearances are deceiving.

Answer 2

Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. As mentioned above, oil prices indirectly affect costs such as transportation, manufacturing, and heating.