India’s Wholesale Inflation Skyrockets to 9.68% as Fuel Prices Surge

New Delhi :  Driven by a massive energy shock linked to the escalating West Asia conflict, India’s Wholesale Price Index (WPI) inflation surged sharply to 9.68% year-on-year in May, up from 8.26% recorded in April. Official data released by the Ministry of Commerce and Industry on Monday revealed that a drastic spike in international energy costs, fueled heavily by the ongoing US-Iran war and the maritime blockade of the Strait of Hormuz, remains the primary catalyst behind the intensifying domestic price pressures.

 The fuel and power segment bore the maximum brunt of the geopolitical crisis, with wholesale inflation in the category leaping to 30.33% in May compared to 24.89% in the preceding month. Underpinning this category, inflation for crude petroleum and natural gas skyrocketed by an unprecedented 61.51%.

The dramatic global oil crunch forced state-run marketing companies to raise retail petrol and diesel prices by ₹7.50 per liter during the latter half of May, driving up logistical expenses.The input-cost inflation rapidly spilled over into other key macroeconomic sectors. Factory-gate costs accelerated during the month, with manufactured products recording a 7.48% inflation rate, up from 6.68% in April, led primarily by basic metals and chemicals. Concurrently, wholesale food article inflation rose to 3.60%, pushed upward by transport costs and localized supply strains.Crucially, the Ministry used this milestone release to overhaul its statistical framework, introducing a modernized WPI series that updates the base year from 2011–12 to 2022–23 and expands the commodity basket from 697 to 957 items. Simultaneously,

the government debuted a trial Producer Price Index (PPI) to track raw inputs and outputs across secondary and tertiary industries. Though wholesale numbers are running hot, consumer-level retail inflation remained comparatively manageable at a 16-month high of 3.93% in May, keeping interest rates steady for the time being.