New Delhi, April 2 -- On 12 March, when February inflation printed at 3.2%, the war in West Asia had been raging for 13 days. Oil company retail agencies, which sell cylinders of liquefied petroleum gas (LPG) at an administered price to registered users, shuttered their doors, anticipating supply cuts.

Consumers were forced to turn to the informal market, where the price had risen five-fold by 12 March, relative to the regulated price even without the Ujjwala price subsidy. Retail agencies later re-opened to long lines and police protection.

There was a massive gap between the official inflation rate and the fuel price spike. This kind of dissonance between reported and experienced inflation is intrinsic to the nature of a single inflat...