Petroleum Price Hike Drives Short-Term Inflation to 27.57%

In the week concluding on Aug 17, short-term inflation experienced a 27.57% spike year-on-year, primarily driven by a jump in petroleum prices, as per official data from Friday. This marked a slight slowdown from the preceding week’s 30.82%.

The Sensitive Price Index (SPI), which measures weekly inflation, increased 0.78% week-on-week, marking its fourth straight weekly rise. This week witnessed a 6.40% hike in petrol prices and a 7.29% increase in diesel.

Of the 51 items listed in the SPI, 32 saw a price increase, seven experienced a decrease, and 12 remained static compared to the prior week. Notably, wheat flour prices shot up by 131.29% from last year’s week, along with significant rises for other items like rice, sugar, and chicken.

Conversely, some products like tomatoes and cooking oil experienced week-on-week price reductions.

The ongoing inflationary trend is attributed to rupee depreciation, escalating petrol prices, and increased electricity bills. The latest IMF projection estimates an average Consumer Price Index (CPI) of 25.9% for the current fiscal, down from the previous year’s 29.6%.