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Informist, Friday, May 15, 2026

 

NEW DELHI – The first increase in retail petrol and diesel prices in nearly four years is likely to push up headline CPI inflation by 15 basis points, according to economists at Barclays. Oil marketing companies Friday raised petrol and diesel prices by INR 3 per litre, passing on the burden on high crude oil prices to consumers. The price of compressed natural gas was also increased by INR 2 per kilogram. 

 

Barclays expects the fuel price hike to add around 8 bps to CPI inflation in May. The full impact of the fuel price hike will only be captured in June CPI data, when Barclays expects these hikes to add 15 bps to headline inflation.

 

The increase in pump prices follows an increase in duty on gold and silver imports earlier this week. The gold import duty hike will add 6 bps to CPI inflation in May and 10 bps in June, Barclays said. Separately, the increase in minimum support price for the kharif season is estimated to impact headline CPI inflation by 5-10 bps for 2026-27 (Apr-Mar), Barclays said.

 

"Having implemented measures to contain non-essential consumption to limit import bill and conserve foreign exchange, we expect policymakers to continue with these measures and additionally announce steps to encourage foreign capital inflows," Barclays said.

 

Economists at the bank expect CPI inflation to average to 4.5% in FY27, pencilling in an INR-5-per-litre increase in pump prices of petrol and diesel. "We expect the government to top up today's Rs3/l increase, if the situation warrants," Barclays said.  End

 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

 

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