New Delhi, April 15 (NationPress) India's wholesale price inflation (WPI) experienced an increase in March, primarily fueled by rising global energy prices amid ongoing geopolitical tensions in West Asia, as reported by economists on Wednesday.

Rahul Agrawal, a Senior Economist at ICRA, indicated that this rise was widespread, particularly in crude petroleum and natural gas, as well as in fuel and power sectors.

"These two categories contributed significantly, accounting for 150 basis points of the overall 175 basis points increase in the headline figure for March 2026 compared to February 2026," he stated.

Agrawal further mentioned that food inflation remained stable at 1.8% in March, while core WPI, which includes non-food manufactured goods, surged to a 41-month peak of 3.7% from 3.3% in February.

On a month-on-month basis, the core index increased by 0.7% in March, consistent with the average of the preceding three months, he added.

Looking forward, he predicted that sustained high global energy prices, combined with increased shipping, freight, and input costs, are likely to elevate landed import expenses and apply upward pressure on wholesale inflation in April.

Assuming an average crude oil price of $85 per barrel for FY27, ICRA forecasts WPI inflation to be around 3.5% for the fiscal year, with potential risks stemming from a possible deficient monsoon linked to El Niño conditions.

In line with these concerns, Rajani Sinha, Chief Economist at CareEdge Ratings, noted that the latest WPI figures reflect a more pronounced impact from the crisis in West Asia, with a sharper rise than retail inflation.

"This discrepancy is due to a significant increase in bulk diesel and other commercial fuel prices, even as retail petrol and diesel prices have remained stable," she explained.

Refineries raised the prices of bulk diesel by over 25% in March, while domestic gas cylinders saw a hike of Rs 60 and commercial cylinders experienced a cumulative increase of Rs 310, she noted.

Despite an early resolution of the West Asia crisis, she anticipates that global crude oil prices will likely range between $85 and $90 per barrel in FY27.

"The burden of elevated global crude oil prices will be distributed among households, the government, and oil marketing companies (OMCs)," she added.

Sinha also mentioned that OMCs might withstand crude prices up to $100–105 per barrel due to robust refining margins. She expects WPI inflation to average around 5% in FY27, assuming crude oil is priced at $90 per barrel.

Regarding monetary policy, she stated that the Reserve Bank of India is likely to keep policy rates unchanged.

"Considering the ongoing growth concerns, the RBI is unlikely to rush into reversing the rate cycle," she indicated.

She further suggested that the central bank could contemplate a rate cut towards the end of the fiscal year if the growth outlook significantly declines below long-term potential growth.