January WPI inflation shoots up to 5.25% versus 3.39% for December

New Delhi: The provisional headline inflation rate based on WPI for January, shot up to a 30-month high of 5.25 percent  as rising global crude oil prices spiked domestic fuel cost, even as food prices moderated.
The last comparable high level of WPI was witnessed in July 2014 at 5.41 percent.
According to the Wholesale Price Index (WPI) data released by the Commerce and Industry Ministry, the annual inflation rate was (-)1.07 percent in January 2016.
The Wholesale Price Index for  ‘All Commodities’ for the month of January 2017 rose by 1.0 percent to 184.6 (provisional) from 182.8 (provisional) for the previous month.
The PMI or Manufactured Product Inflation stood at 3.99% versus 3.67% month on month. The Primary Articles Inflation stood at 1.27% versus 0.27% of December and the index for ‘Non-Food Articles’ group rose by 2.5 percent
Last month, wholesale food prices fell 0.56 percent year-on-year, compared with a provisional 0.70 percent fall in December.
The spurt in inflation can be attributed to the inflation in the ‘fuel and power’ basket, which more than doubled to 18.14 percent in January, up from 8.65 percent in the previous month.
Inflation in diesel and petrol shot up to 31.10 percent and 15.66 percent during the month.
Oil prices have been on rise since OPEC in early December decided to cut output for the first time in eight years. Spot LNG prices have also risen from USD 5.25 to about USD 9 per MMBTU on winter heating requirements. Liquefied natural gas (LNG) is used for power generation.
The WPI inflation for November were released to 3.38 percent against the provisional estimate of 3.15 percent.
The rise in wholesale inflation is in contrast to the fall in retail inflation, which hit a five-year low of 3.17 percent in January.