New Delhi: India’s June headline inflation could rise to 11% as a direct fall out of the fuel price hike effected last week, a senior government official said.
“Whatever would have been the inflation (in June), it is going to be up by 0.9 percentage points,” the official, who did not wish to be quoted, told Reuters on Thursday.
India’s wholesale price inflation rose to 10.16% in May, marginally higher than 9.59% in April.
“It can touch 11% (in June),” he said.
June inflation data is expected on 14 July.
India’s weekly food inflation eased to an eight-month low of 12.92% in the year to 19 June, lower than the previous week’s annual rise of 16.90%.
The slackened pace was mainly on account of base effect, he said. “But, there is no reason for celebration.”
The ministerial panel, which decided to free up petrol prices on 25 June, had decided to fix a subsidy of about Rs1.5 on retail diesel prices, he said.
The panel has decided to allow domestic oil companies to fix retail diesel prices based on international crude oil prices, he said, adding, finer details of the new diesel pricing system are being worked out and could be announced in the coming weeks.
“Diesel and petrol are both on float (now), diesel on float with a per-litre subsidy and finer details of how this will be handled in the long run are yet to be worked out,” he said.