( Fallout of Russian War upon Ukraine. )
Explaining the surging cost of petrol and diesel prices in the country, Union minister Hardeep Sigh Puri said that other countries are facing very steep inflation as compared to India.
“Economies of other big countries are facing steepest inflation and a sharp decline in living standards since World War II. It is a phenomenon. We are in a situation where we can control prices to the extent we can,” the Union Minister of Petroleum and Natural Gas said in a press conference.
Puri further mentioned that oil companies have started detailing under-recoveries or losses, which are as high as ₹17.1 per litre on petrol and ₹20.4 on diesel.
Puri said fuel retailers have knocked on the doors of the government seeking ‘relief’ but hastened to add that pricing is their decision.
Retail inflation in India surged to 7.79% on an annual basis in the month of April owing to higher edible oil and fuel prices. The headline inflation is now at the highest level since the 8.33% hit in May 2014. The wholesale price index inflation has inched close to 15% and consumer price inflation is nearly 8%. The Reserve Bank of India (RBI) last month raised the repo rate by 40 basis points to 4.40% amid high inflation woes. The RBI also increased the cash reserve ratio (CRR), the minimum reserve or percentage of cash commercial banks have to maintain with the central bank, by 50 basis points to 4.50%.
Several experts have said that India’s retail inflation is expected to remain uncomfortably high in the current fiscal despite the Centre’s efforts to tame stubborn price pressure through tax cuts. A median of projections by eight brokerages puts inflation at 6.7% in 2022-23, sharply up from the previous year’s 5.5%.
“Due to the ongoing geopolitical tensions and high commodity prices, it was expected that the inflation numbers will be on the higher side. Anticipating this, RBI has already started fiscal tightening by increasing the repo rate. With the global uncertainty continuing and commodity prices remaining high, the inflation numbers may witness upward pressure in coming months also,” Sachin Gupta, CEO of Share India Securities said.