Wholesale Inflation Climbs to Record High as Fuel and Power Costs Drive Price Surge India’s wholesale inflation surged sharply in May 2026, highlighting the significant impact of rising global energy prices triggered by the ongoing conflict in West Asia. According to data released by the Ministry of Commerce and Industry on Monday, wholesale prices have risen by 6.60% between February and May 2026, with nearly half of the increase attributed to the fuel and power sector.
The latest figures were released alongside the introduction of a revamped Wholesale Price Index (WPI), which shifts the base year from 2011-12 to 2022-23. The new series expands coverage from 697 to 957 commodities and incorporates changes in classification, including moving crude petroleum and natural gas into the fuel and power category. The government also unveiled Producer Price Indices (PPI), which are expected to gradually replace the WPI in line with international practices.
Wholesale inflation has accelerated rapidly in recent months. Annual WPI inflation rose from 2.18% in February to 3.98% in March, 8.26% in April, and 9.68% in May. This marks the seventh consecutive month of rising inflation and the highest monthly readings recorded under the new WPI series.
Fuel prices have emerged as the primary driver of the inflation surge. Inflation in the fuel and power category jumped from a contraction of 3.37% in February to a steep 30.33% increase in May. Within the segment, mineral oil prices rose by 49.82%, while crude petroleum and natural gas prices recorded an even sharper increase of 61.51% compared to the previous year.
Inflation in primary products also increased from 1.64% in February to 4.99% in May, while manufactured goods inflation climbed from 3.61% to 7.48% during the same period. The WPI food index, which combines food articles and manufactured food products, rose 4.49% year-on-year in May, up from 3.11% in April.
Although a new US-Iran agreement announced on Monday has raised hopes of easing tensions in global energy markets, economists believe inflationary pressures are unlikely to subside immediately. Analysts point to continued disruptions in oil supply routes and strong pent-up demand as factors that could keep crude prices elevated in the near term.
The latest data underscores the vulnerability of India’s inflation outlook to global energy shocks, with fuel costs continuing to exert significant pressure across the broader economy.
