New Delhi: The Ministry of Commerce and Industry has announced that India’s wholesale inflation has risen to 8.3% in April, a significant jump due to the massive surge in prices of crude oil, natural gas and power, following the disruptions in oil supplies from the Middle East.
This unexpected rise in wholesale inflation will cascade to retail prices soon, even as Brent crude prices rise above the $105 mark as the Strait of Hormuz continues to be blocked. Fuel and power inflation has risen 24.71% in April from 1.05% in March. The overall Fuel and power index has risen 18.22% month on month to 181.7 in April from 153.7 in March, according to ANI.
Although electricity prices declined by 2.53% from March to April, mineral oil prices have risen 29.37% in April compared to March.
All of this has lead to higher logistics and transport costs, affecting the overhead prices at the wholesale mandis across the country.
This is leading to a surge in food prices, with perishables like vegetables and fruits being 12-15% dearer due to higher diesel costs. Dairy and poultry costs have also risen due to increased fodder prices and higher energy prices to cold storage.
With the WPI inflation rising, the pressure on the Reserve Bank of India (RBI) to address the situation has intensified. With wholesale prices requiring just a few months to fully reflect in the Consumer Price Index (CPI), the current energy shock is expected to keep retail inflation on the higher side.
