WPI inflation spikes to 42-month high as West Asia crisis raises energy prices

New Delhi, May 14 -- Wholesale price inflation surged to a 42-month high of 8.3 per cent in April, driven largely by a sharp rise in energy costs linked to disruptions from the ongoing West Asia conflict, according to official data released on Thursday.

The latest figure marks a steep jump from 3.88 per cent recorded in March and 0.85 per cent in April last year. Analysts at Barclays noted that the month-on-month rise in wholesale inflation was the sharpest ever seen in the current data series.

Fuel and power prices were the primary contributors to the surge, with inflation in this category climbing to 24.71 per cent in April from 1.05 per cent in March. Inflation in crude petroleum alone spiked to 88.06 per cent, the highest level since October 2021. The increase comes amid supply disruptions following the West Asia war and a blockade of the Strait of Hormuz, which has affected crude imports into India and pushed global prices higher. Core wholesale inflation, which excludes food and fuel, rose to 5 per cent year-on-year, led by higher prices of manufactured goods such as metals, chemicals and textiles. Inflation in manufactured products stood at 4.62 per cent, up from 3.39 per cent in the previous month.

Food inflation remained relatively stable at 1.98 per cent in April compared to 1.90 per cent in March, while inflation in non-food articles increased to 12.18 per cent from 11.5 per cent.

The commerce and industry ministry said the positive inflation rate was "primarily due to an increase in prices of mineral oils, crude petroleum and natural gas, basic metals, other manufacturing and non-food articles."

Within the fuel category, petrol inflation rose to 32.40 per cent, diesel to 25.19 per cent and LPG to 10.92 per cent.

Despite a 50 per cent rise in global crude oil prices, retail fuel and domestic LPG rates have largely remained unchanged, helping keep consumer inflation at 3.48 per cent in April, though commercial LPG prices have been raised.

Published by HT Digital Content Services with permission from Millennium Post.