Fuel inflation crosses 30%, pushes wholesale inflation to 9.68% in May

India's wholesale price inflation rose sharply to 9.68% in May from 8.26% in April, driven by higher prices of fuel and power, food articles and manufactured products. The latest Wholesale Price Index (WPI)-based inflation data was released by the Ministry of Commerce and Industry under the revised series with 2022-23 as the new base year, replacing 2011-12.

Fuel and power remained the biggest contributor to the increase in wholesale inflation. Inflation in the fuel and power category climbed to 30.33% in May from 24.89% in April. Within the segment, crude petroleum inflation rose to 61.51% from 56.31% in the previous month. The rise came amid elevated global crude oil prices and supply concerns linked to tensions in West Asia.

Food prices also recorded an increase during the month. Inflation in food articles rose to 3.60% in May compared with 2.43% in April. Data also showed that inflation in primary articles increased, reflecting higher prices across several agricultural commodities and related categories.

Manufactured products, which form the largest component of the WPI basket, recorded inflation of 7.48% in May, up from 6.68% in April. The increase indicated continued cost pressures on producers as higher energy prices affected input costs across industries. The latest figures represent the first inflation reading under the revised WPI series introduced by the government.

Retail inflation also moved higher during the month, rising to 3.93% in May from 3.48% in April. Earlier this month, the Reserve Bank of India raised its inflation forecast for the current financial year to 5.1% from 4.6%, citing increasing input costs and the pass-through of higher global energy prices to domestic fuel rates. Petrol and diesel prices increased by ₹7.50 per litre during the second half of May following the rise in global crude oil prices.