Wholesale inflation soars to 15.08% in April on high fuel prices

India’s wholesale inflation increased to 15.08% in April on the back of an uptick in fuel prices as well as other commodities. The inflation based on the wholesale price index (WPI) stood at 14.55% in March. With this, WPI inflation has been in the double digits for the 13th month in a row.

Primary articles saw marginal easing of wholesale prices as WPI inflation for the segment decreased to 15.45% in April from 15.54% in March. Fuel and power saw the wholesale rate of inflation rise to 38.66% during the month under review from 34.52% a month ago. Wholesale inflation for manufactured products increased to 10.85% from 10.71% in March. Wholesale prices in the food index increased by 8.88% during April compared with 8.71% in March.

“The high rate of inflation in April 2022 was primarily due to rise in prices of mineral oils, basic metals, crude petroleum and natural gas, food articles, non-food articles, food products and chemicals and chemical products, etc. as compared to the corresponding month of the previous year,” says the Department for Promotion of Industry and Internal Trade.

Prices of food articles, non-food articles, crude petroleum and natural gas, and minerals increased 3.61%, 1.20%, 0.59% and 0.13%, respectively during April 2022 as compared to March 2022 in the primary articles category.

Wholesale prices of mineral oils increased 7.58% in April 2022 as compared to March 2022, while that for electricity declined 9.68% during this period.

Out of the 22 NIC two-digit groups for manufactured products, 18 groups witnessed increase in prices while 3 groups saw prices decline. The increase in prices is mainly contributed by basic metals, chemicals and chemical products, textiles, machinery and equipment, electrical equipment, and food products.

Some of the groups that have witnessed decrease in prices are motor vehicles, trailers and semi-trailers, computer, electronic and optical products; leather and related products in April 2022 as compared to March 2022. Manufacturing of beverages remained unchanged during the month.

While the more closely followed retail inflation has been growing for the past four months, reaching an eight-year high in April, wholesale inflation has been much stickier, maintaining a rising trend for over a year now. Geopolitical tensions and subsequent supply crunch has led to an increase in prices of fuel, food and other commodities.

Earlier this month, the Reserve Bank of India (RBI) increased key policy rates after an off-cycle meeting of the monetary policy committee (MPC) to suck out the excess liquidity in the system and bring prices down.