India's May Wholesale Price Inflation Rose to 9.68% on Fuel-Cost Surge
By Reuters | 15 Jun, 2026

The energy shock is causing fuel costs to run sharply higher than India's retail inflation, which was at 3.93% in May.

India's wholesale price inflation rose to 9.68% year-on-year in May, government data released on Monday showed, as the energy shock stemming from the conflict in the Middle East persisted.

Wholesale inflation, which has a higher weightage of fuel products, is running sharply higher than India's retail inflation, which was at 3.93% in May. However, the sharp surge in wholesale prices is not seen impacting interest rates in the economy immediately, according to economists.

The Indian central bank, which targets 4% retail inflation within a tolerance band of 2% to 6%, kept rates unchanged at its meeting in June, signalling it will watch for any second-round impact of higher fuel prices before tightening monetary policy.

Economists polled by Reuters had projected wholesale inflation rising to 9.05%. The print stood at 8.26% in April.

The data, the first print from the revised series with a base year of 2022-23, showed inflation rose at the fastest pace in six months under comparable numbers calculated by the government under the new series.

Wholesale fuel and power prices jumped 30.33% year-on-year in May, against a rise of 24.89% in April, data showed. Petroleum and natural gas prices rose 61.51% in May.

Crude prices have risen 27% since the U.S.-Israeli war on Iran broke out in late February, prompting state-run oil marketing companies to raise retail fuel prices four times in May.

There could be some relief expected, however, as the U.S. and Iran have agreed on a framework to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent global oil prices falling.

"The recent cooling in global energy and commodity prices after the easing of tensions in the West Asia is expected to provide respite to the WPI inflation print for June 2026," Rahul Agrawal, principal economist at rating agency ICRA said.

Wholesale food prices rose 3.60% year-on-year in May after advancing 2.43% in April, while prices of manufactured products advanced 7.48% against April's 6.68% rise.

NEW INDEXES RELEASED

The May release also debuts the new producer price indicators, including an output PPI, a trial input PPI and a services PPI covering seven sectors — banking, securities transactions, pension fund management, insurance, railways, air passenger transport and telecommunications.

The producer prices in May rose 9.38%, according to Reuters' calculation.

(Reporting by Shubham Batra and Shivangi Acharya in New Delhi; Editing by Janane Venkatraman)