India’s WPI Inflation Jumps to 12.94% in May due to Surging Fuel Prices

India’s WPI Inflation Jumps to 12.94% in May due to Surging Fuel Prices Another rise in Petrol Prices was registered on July 8, 2021. (ANI Photo)

New Delhi: The Wholesale Price Index inflation rate in India shot up to a record high of 12.94 per cent in the month of May 2021, up from 10.5 per cent recorded in April, the latest data from the Ministry of Commerce and Industry showed on Monday. The sudden spike was due to a surge in fuel prices in the country, the ministry added in the statement. The fuel and power inflation rates have quadrupled to 37.6 per cent from the 9.75 per cent recorded in March and against 20.94 per cent in April this year, the data showed.

“The high rate of inflation in May 2021 is primarily due to low base effect and rise in prices of crude petroleum, mineral oils viz. petrol, diesel, naphtha, furnace oil etc. and manufactured products as compared the corresponding month of the previous year, ” it said.

The wholesale food prices inflation rose marginally from 7.58 per cent in April to 8.11 per cent in May while inflation in manufactured products’ also increased from 9 per cent in April to 10.83 per cent in May.

READ MORE: Petrol Prices Reaches Rs 102.58 Per Litre in Mumbai After Another Hike

The Central government has been facing severe criticism by political parties over surging fuel prices in the past week. Bahujan Samaj Party (BSP) chief Mayawati on Sunday accused the central and the state governments of not paying attention towards the rising prices of diesel and petrol. “On one hand, there is the tremendous impact of the COVID-19 pandemic, and on the other, prices of petrol and diesel are continuously rising. Due to this, the prices of essential items are also soaring,” she said in a tweet.

This has made people’s lives miserable, but the Centre and the state governments are not paying any attention, Mayawati said, adding, “This is very saddening.” The BSP supremo said prices of petrol and diesel in some states have almost reached Rs 100, and as per reports in the media, there is anger among the people. “The government should focus on reducing inflation, as it has reduced the GST on equipment used in treatment of COVID-19,” she said in another tweet.

Slamming the Centre over rising fuel prices, former petroleum minister M Veerappa Moily on Saturday said the government is solely responsible for the “illogical price regime” and demanded that petrol and diesel be brought under the purview of the GST regime.

Moily said India levies one of the highest taxes on petrol and diesel in the world, and asserted that this “illogical taxation liability” will have to be halted immediately. After the Modi government took over reins of India in 2014, the pattern of taxation has been such that it has led to petrol prices crossing Rs 100 per litre in several districts in the country, he said in a statement. The central excise duty on petrol was Rs 9.28 in 2014 and now has risen up to Rs 31.83 in 2021.

READ ALSO: Fuel Price Hike: Congress holds nationwide protest as petrol prices surge past Rs 100 per litre

In January and February, prices were hiked 10 and 16 times, respectively, he said. With the global prices of crude dipping and rupee relatively stable, Indians should have been paying less for fuel, Moily argued. In the last 14 months, international oil prices have gone down by around five per cent in dollar terms and in this scenario, the retail prices of petrol and diesel, in rupee terms, should drop at least by five per cent as compared to January last year, instead they are 20 per cent higher, the Congress leader said.

Petrol and diesel are not part of the Goods and Services Tax (GST) but attract excise duties from the Centre and value added tax from states that make them one of the highest-taxed commodities in the country, he noted.

While the decision of the United Progressive Alliance was to reduce imports and go for indigenous production and make India self sufficient in oil and gas exploration by 2013, the present government has not invested in oil and gas exploration since 2014, he claimed.

This is the right time to impose GST on petrol and diesel and give up the present adhocism which has contributed to both inflation and also caused irreparable damage to both internal and external trade, Moily alleged.

(With inputs from PTI)

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