Oil prices fuelled September wholesale price-based inflation (WPI) to a two-month high of 5.13%. WPI was 4.53% in August and 5.27% in July.
The price rise in fuel and power basket was 16.65% in September, the government data showed. Petrol price rose by 17.21% and diesel by 22.18%. Inflation in domestic cooking gas (LPG) was at 33.51%.
Prices of food articles, too, firmed up in the month under review but vegetables witnessed deflation.
Inflation in cereals increased to 5.54% while in wheat it was 8.87% and potato, as high as 80.13%.
The price rise in milk, paddy and oilseeds declined. Primary articles inflation was up to 2.97% after declining 0.15% in August.
“... though the demand conditions in the economy have remained strong the pace of demand growth is gradually declining. The prevailing market price for most Kharif crops at major 'mandis' has remained lower than the MSP, suggesting procurement has not picked up. The future inflation trajectory would depend on the response of mandi prices with respect of new MSP and the movement of crude oil price and value of the currency,” said Devendra Kumar Pant, Chief Economist at India Ratings & Research (Fitch Group).
The rise in WPI comes on the back of a marginal increase in consumer price-based inflation.
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