The direct impact of the energy crisis and geopolitical tension at the international level is now visible on the Indian economy. According to the data released by the Ministry of Commerce and Industry, a huge jump has been recorded in the inflation rate based on Wholesale Price Index (WPI) in the month of April.
What is the reason for inflation in April?
In the month of March, the wholesale inflation rate was at the level of 3.88 percent, which has increased rapidly to 8.30 percent in April. The main reason behind this tremendous increase is the huge increase in the prices of fuel, electricity and crude petroleum. According to the ministry statement, this positive rate of inflation in April 2026 is mainly due to increase in prices of mineral oils, crude petroleum, natural gas, basic metals, other manufacturing and non-food items.
Global crisis and supply chain disruption
This sharp jump in wholesale inflation directly reflects the ongoing crisis in West Asia. Additionally, the effective blockade of the Strait of Hormuz has made the situation more serious. This waterway is very strategically important for India as India obtains most of its imported crude oil through this route.
Impact on various sectors and products
The inflation situation in the fuel and energy sector has been most worrying. Key figures for different baskets are as follows:
- Fuel and Electricity: Inflation rate in this region has jumped from 1.05 percent in March to 24.71 percent in April.
- crude petroleum: Inflation rate of crude petroleum reached 88.06 percent in April as compared to 51.5 percent in the previous month.
- Petrol and high-speed diesel: Inflation rate in petrol increased from 2.50 percent to 32.40 percent, while in high-speed diesel it increased from 3.26 percent to 25.19 percent.
- LPG: LPG inflation rate was positive at 10.92 percent in April compared to (-) 1.54 percent in March.
- Food and non-food items: The inflation rate of food items increased marginally to 1.98 percent in April as compared to 1.90 percent in March. At the same time, the inflation rate of non-food items increased from 11.5 percent to 12.18 percent.
Government’s stance and future outlook
Globally, a huge jump of up to 50 percent has been seen in the prices of crude oil. However, despite this, the Government of India has till now kept the retail prices of petrol, diesel and domestic LPG cylinders stable to provide relief to common families. This step has been taken to protect retail consumers from the direct hit of inflation, but on the other hand, the prices of commercial LPG cylinders have been increased. It will be important to see how long global geopolitical tensions and supply chain disruptions persist and how long the government can manage this pressure.