New
Delhi: The latest wholesale price index (WPI) data
was released by the government yesterday. The year-on-year
inflation rate went up by almost a full percentage point,
from 6.52 per cent for the week ended July 17 to 7.51
per cent for the latest recorded week ending July 24.
There
is more bad news to follow as this inflation number does
not take into account the increase in prices of diesel
and petrol effected by the public sector oil companies
on July 31. Prices of diesel were raised by roughly 6
per cent and that of petrol by 3 per cent. This, would
push up the inflation rate further, when the government
comes out with the WPI data for the week ending July 31.
However,
the immediate impact of the diesel and petrol price hike
may not be large. For one, the combined weight of the
two transport fuels in the WPI comes to 2.90849 per cent
(2.02034 for diesel and 0.88815 for petrol), which is
hardly a fifth of the total weight of 14.22624 per cent
for the `fuel, power, light and lubricants (FPLL)' group.
An average price increase of 5 per cent for the two fuels
would mean an increase of one per cent in the FPLL index,
from 274.4 for the week ended July 24 to about 277.1 for
the week ending July 31. In other words, a jump of less
than 3 points. Considering a relative weight of 14.22624
per cent for the FPLL index in the general index, this
translates to a rise of 0.4 in the overall WPI, from 186.2
to 186.6 for the week ending July 31.
During
the corresponding period last year, the WPI went up from
173.2 to 173.4 for the week ended August 2, 2003. That,
in
effect, would mean that the inflation rate in the coming
week would be in the region of 7.61 per cent, even after
taking into account the recent transport fuel hike.
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