Wholesale inflation hits 11-month high at 2.13%; crude surge may lift WPI further

Wholesale price inflation accelerated to 2.13 per cent in February–the highest level in 11 months–as firming prices of food and non-food articles kept cost pressures elevated despite some easing in vegetable inflation, official data released on Monday showed.The WPI-based inflation rate has now risen for the fourth consecutive month. It stood at 1.81 per cent in January and was 2.45 per cent in February last year.Inflation in food articles increased to 2.19 per cent in February from 1.55 per cent a month earlier. Although vegetable inflation moderated to 4.73 per cent from 6.78 per cent, prices of pulses, potato and egg, meat and fish registered higher inflation during the period.“Positive rate of inflation in February 2026 is primarily due to an increase in prices of other manufacturing, manufacture of basic metals, non-food articles, food articles and textiles, etc.,” the industry ministry said in a statement.Deflation in the fuel and power category narrowed to 3.78 per cent in February from 4.01 per cent in January. Global crude prices averaged USD 68 per barrel during the month compared with USD 63 per barrel in January.Economists said wholesale inflation could gather further momentum if crude oil prices remain elevated and spill over to sectors such as fertilisers and aluminium, given that WPI is more closely aligned with international price trends than the retail inflation basket.Barclays said in a research note that the pass-through of higher crude prices due to the Middle East conflict would be more visible in wholesale inflation.“With a sharp jump in crude oil prices crossing USD 100/bbl as of 16 March, the corresponding WPI will likely reflect this in the March print,” the note said, PTI quoted.India Ratings and Research also cautioned that rising crude prices since the US-Iran war could push wholesale inflation higher from March until supply-side pressures ease. The average price of the Indian crude basket for March 2026 (up to March 12) has touched a 44-month high of USD 101.25 per barrel.Ind-Ra Chief Economist Devendra Pant said wholesale inflation may remain elevated amid geopolitical tensions and a favourable base effect.“The retail prices of petroleum products might remain the same for some time, which may negate any sharp jump in retail inflation. However, the increase in crude oil prices will push wholesale inflation higher. Ind-Ra expects wholesale inflation in March to jump to 3.7 per cent,” he said.According to WPI data, inflation in manufactured products rose marginally to 2.92 per cent in February from 2.86 per cent in January, while non-food articles inflation surged to 8.80 per cent from 7.58 per cent.PHDCCI President Rajeev Juneja said continued policy attention to supply-chain efficiency, logistics cost reduction and domestic manufacturing support would be crucial to contain cost-push pressures amid global uncertainty.Separate data released earlier showed retail inflation rose to 3.2 per cent in February from 2.75 per cent in January. The Reserve Bank of India, which primarily tracks retail inflation while setting policy rates, has reduced benchmark interest rates by 1.25 percentage points in the current fiscal year as price pressures remained contained