Wholesale Inflation Climbs To 8.3% In April On Rising Fuel Costs

India’s wholesale inflation rose sharply to 8.3% in April, marking its highest level since late 2022, as elevated crude oil prices and higher energy costs lifted fuel and manufacturing prices across sectors, according to data released by the Ministry of Commerce and Industry on Thursday.

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The Wholesale Price Index (WPI)-based inflation stood at 3.88% in March. The April print also came in significantly above a Reuters estimate of 4.4%.

The ministry said the increase in inflation was mainly driven by higher prices of mineral oils, crude petroleum, natural gas, manufactured products and basic metals.

Fuel and power inflation recorded the steepest increase during the month. Inflation in the fuel and power category jumped to 24.71% in April from 1.05% in March as global crude oil prices remained elevated amid tensions in West Asia.

Inflation in crude petroleum and natural gas surged 67.18% year-on-year. Petrol inflation rose to 32.4% in April from 2.5% in March, while high-speed diesel inflation accelerated to 25.19% from 3.26%. Liquefied petroleum gas (LPG) inflation also turned positive at 10.92% after contracting 1.54% in March.

Manufacturing Prices Move Higher

Higher energy costs also pushed up factory-level prices during the month. Inflation in manufactured products rose to 4.62% in April from 3.39% in March. The increase was led by chemicals, machinery, textiles and metal products.

Basic metals inflation climbed to 7%, while chemicals and chemical products inflation rose to 5.09%, according to official data.

Primary articles inflation also increased to 9.17% in April from 6.36% in the previous month, driven by higher prices of crude petroleum, minerals and oilseeds.

On a month-on-month basis, fuel and power prices increased 18.22%, contributing significantly to the rise in overall wholesale inflation.

Wholesale Food Inflation Remains Relatively Moderate 

While there was an increase in some categories, food inflation at the wholesale level remained relatively moderate.The WPI food index rose 2.31% in April compared with 1.85% in March. Vegetable inflation stood at 0.53%, while onion prices declined 26.45% year-on-year.

Inflation in pulses remained negative at -4.03%. However, prices of fruits, eggs, meat and fish continued to record increases during the month.

RBI Monitoring External Risks

The Reserve Bank of India, in its April monetary policy meeting, had highlighted risks arising from geopolitical tensions and global commodity prices.

RBI Governor Sanjay Malhotra said the Indian economy remains resilient despite external shocks, while noting that the country is facing a supply-side shock linked to global developments.

The central bank has projected CPI inflation at 4.6% for FY27, with quarterly estimates ranging between 4% and 5.2%.

Recent wholesale inflation numbers reflect rising costs on the producer side with the impact of rising crude oil prices and commodity prices still being felt on domestic supply chains and input costs for industries.