Four-month high: Rising fuel costs push up March's wholesale price inflation

New Delhi, April 18

High cost of 'fuel and power' due to the Russia-Ukraine war along with those of primary articles pushed up India's March 2022 wholesale inflation to a 4-month high level.

Accordingly, the annual rate of inflation, based on wholesale prices, rose to 14.55 per cent last month from 13.11 per cent reported for February 2022.

Similarly, on a year-on-year (YoY) basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry showed an exponential rise last month over March 2021, when it stood at 7.89 per cent.

"The annual rate of inflation is 14.55 per cent (provisional) for the month of March, 2022 (over March, 2021) as compared to 7.89 per cent in March, 2021," the Ministry said in its review of 'Index Numbers of Wholesale Price in India' for March.

"The high rate of inflation in March, 2022 is primarily due to rise in prices of crude petroleum and natural gas, mineral oils, basic metals, etc., due to disruption in the global supply chain caused by the Russia-Ukraine conflict."

Besides, the month over month change in WPI index for March, 2022 stood at 2.69 per cent as compared to February, 2022.

As per the data, the primary articles segment, which has one of the highest weightage in the WPI, increased at a faster rate of 15.54 per cent in March as compared to 13.39 per cent reported for February 2022.

In the fuel and power segment, which has a weightage of 13.15 per cent, the rise in inflation was recorded at 34.52 per cent from 31.5 per cent in February 2022.

The cost of manufactured products, which has a weightage of 64.23 per cent, increased at a faster rate of 10.71 per cent from 9.84 per cent.

Similarly, the growth rate of WPI food index, consisting of food articles from the primary articles group and food products from the manufactured products group, rose to 8.71 per cent from 8.47 per cent.

"The WPI inflation recorded a broad-based and higher than expected increase to a four month high 14.6 per cent in March 2022, following the spike in commodity prices amidst the escalating Russia-Ukraine conflict," said Aditi Nayar, Chief Economist, ICRA.

"The sequential dip in the food and beverages index in March 2022, and the associated decline in its inflation rate has provided some relief, after the sharp rise seen in the CPI food inflation last week."

According to Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research: "Clearly, the data reinforces the presence of stronger inflationary pressures in the manufacturing and the services sector."

"With the sharp rise in crude oil prices and the breach of USD 100 pb consequent to the intensification of the Russia-Ukraine conflict from end Feb-22, there has been an acceleration in commodity prices and this is visible in both the sequential rise in primary commodities and fuel and power index of 2.1 per cent and 5.7 per cent respectively."