Wholesale price index inflation sharply rises to 9.68% in May, largely driven by higher prices of fuel | Business

Wholesale price inflation surged to 9.68 per cent in May, up from 8.26 per cent in April, led by a sharp spike in fuel and power, manufactured, and food prices. The Commerce and Industry Ministry on Monday released the Wholesale Price Index (WPI)-based inflation data, revising the base year to 2022-23, from 2011-12 earlier. Wholesale price index (WPI)-based inflation in fuel and power climbed to 30.33 per cent in May as against 24.89 per cent in April. In crude petroleum, inflation was 61.51 per cent in May, as against 56.31 per cent in the previous month.

How much did wholesale inflation increase in the last year?

Fuel, electricity and crude oil set the prices on fire

The biggest reason for this massive surge in wholesale inflation is the record-breaking rise in fuel, electricity, and crude oil prices. Wholesale inflation for fuel and electricity jumped from 24.89 per cent in April to 30.33 per cent in May. Meanwhile, crude oil inflation reached a dangerous 61.51 per cent in May, up from 56.31 per cent in April.

What’s behind the sharp rise?

This sharp increase in wholesale inflation is due to the crisis in West Asia and the effective blockade of the Strait of Hormuz, the sea route through which India imports most of its crude oil. Petrol and diesel prices in India were increased by Rs 7.50 per litre in the second half of May due to rising global crude oil prices.

Food and manufacturing also became expensive

Fuel prices have directly affected the budget for daily-use items. Due to higher transportation costs, wholesale inflation for food items rose to 3.60 per cent in May, up from just 2.43 per cent in April. Furthermore, inflation for manufactured goods also rose from 6.68 per cent in April to 7.48 per cent in May.