The wholesale price inflation in India jumped to 9.6% in May from 8.2% in April amid a spike in global fuel prices.

The wholesale price index-based inflation in fuel and power jumped to 30.3% in May as compared to 24.8% in the previous month. The inflation in crude petroleum and natural gas was 61.5% in May, up from 56.3% in April.

The wholesale price index tracks the average changes in prices of a basket of goods sold in bulk before reaching retail consumers.

Global energy prices have been elevated since March after the conflict broke out in West Asia and the Strait of Hormuz was effectively blocked for most international commercial vessels.

India imports 88% of its crude oil needs and about half of its natural gas requirement. This mostly comes through the strait.

The global price of benchmark Brent crude had reached as high as $114 per barrel on May 4. It was $78 per barrel on February 27, a day before the conflict started. The price fell to $83 per barrel on Monday after the US and Iran announced that they had reached a peace deal and that the strait will be reopened.

The wholesale inflation data released by the Ministry of Commerce and Industry on Monday was the first set from the revised wholesale price index series with 2022-’23 as the base year. The revised series also expanded the commodity basket to 957 from 697 items. The base year in the earlier series was 2011-’12.

The data showed that the inflation in food articles was 3.6% in May as against 2.4% in April. The inflation in manufactured products had risen to 7.4% in May. It was 6.6% in April.

The wholesale inflation was significantly higher than retail inflation as it has a higher weightage of fuel products. Retail inflation in May was 3.9%.

Written by Nachiket Deuskar. Edited by Tanya Shrivastava.