Even as food inflation eased to its seven-week low at 7.61 per cent for the week ended June 25 owing to cheaper pulses and vegetables, Finance Minister Pranab Mukherjee on Thursday conceded that inflationary pressure would persist as a fall-out of the recent hike in prices of petroleum products.

The WPI (Wholesale Price Index) data on food and primary articles released here revealed that food inflation at this level was pegged marginally lower than the 7.78 per cent in the previous week and way below the near 20 per cent during the like period of June last year and thereby clearly indicating that the base effect has come to play in the food segment.

The data also showed that though there has been a marginal fall in all three segments — food articles, non-food primary items and fuels — on a year-on-year basis, the fuel index rose from 160.2 to 166.3 during the week on account of the hikes of Rs.50 a cylinder of cooking gas, Rs.3 a litre of diesel and Rs.2 a litre of kerosene on June 24.

Almost as a forewarning of what to expect in the weeks ahead, Mr. Mukherjee said: “There is inflationary pressure in the system and these weekly variations [in food inflation figures] are mainly because of base effect …This six-point increase [in the fuel index] is mainly because of enhancement of prices of diesel, kerosene and LPG. That has its impact.”

Mr. Mukherjee went on to add that there could be some upward movement in headline inflation in June from 9.06 per cent in May and this would be mainly owing to the fuel price hike announced last month.

Evidently, the apprehension is that while food prices would tend to soften in the event of a good monsoon, the hike in fuel prices could affect the overall trend. In fact, the food segment may again get impacted by way of higher transportation costs for grains and other crops.

During the week, pulses turned cheaper by over 9 per cent year-on-year, while prices of vegetables and potatoes eased by 8.74 per cent and 2.13 per cent, respectively. On the other hand, other edibles continued to remain expensive such as fruits by 22.75 per cent and onions by 21.24 per cent. Alongside, protein-rich items like eggs meat and fish were up 10.12 per cent and milk by 12.10 per cent on an annual basis.

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