Wholesale inflation jumps to 8.3% as fuel costs surge

India’s wholesale inflation accelerated to 8.3% in April, the highest reading in recent months, as fuel and power prices surged and higher crude costs began feeding into the broader price chain.

The annual rate of inflation based on the Wholesale Price Index (WPI) rose to 8.3% in April from 3.88% in March, according to data released by the ministry of commerce and industry.

The ministry said the increase was primarily due to higher prices of mineral oils, crude petroleum and natural gas, basic metals, other manufacturing items and non-food articles.

Fuel and power were the main pressure points. The index for the category rose 18.22% month on month in April, while mineral oil prices increased 29.37% from March. The fuel and power inflation rate stood at 24.71% in April, compared with 1.05% in March.

Primary articles also added to the pressure. The index for primary articles rose 2.58% month on month, led by crude petroleum and natural gas, food articles and minerals. Wholesale inflation for primary articles stood at 9.17% in April.

Manufactured products, which carry the largest weight in the WPI basket, also moved higher. The index for manufactured products rose 1.4% from March, with price increases seen in basic metals, chemicals, textiles, food products and machinery and equipment. Manufactured products inflation stood at 4.62% in April.

Food inflation remained comparatively contained but moved up. The WPI Food Index increased to 195.1 in April from 192.8 in March, while food inflation rose to 2.31% from 1.85%.

The sharp rise in wholesale prices comes as India faces a broader energy shock from the West Asia conflict. Retail fuel prices were raised on Friday for the first time in four years, increasing the risk that wholesale cost pressure could pass through to consumer prices in coming months.

The April data will complicate the policy outlook. While consumer inflation remains the Reserve Bank of India’s main target, WPI is closely watched as an early signal of producer cost pressure. With fuel, metals and manufactured goods rising together, businesses may find it harder to absorb costs without raising prices.