Wholesale price-based inflation inched higher to 10.55 per cent in June, owing to the pass through effect of the June 25 hike in prices of petroleum products.

The WPI numbers were provisionally 10.16 per cent in May, while it was revised upwards to 11.23 per cent for April from the provisional 9.59 per cent.

However, the double digit inflation in June could be partly attributed to low base in the year—ago period when the inflation was at —1.01 per cent, which means even a small increase now would seem large.

In June, the fuel index rose by 1.7 per cent, due to higher prices of kerosene (9 per cent), electricity (4 per cent), petrol (2 per cent) and Liquefied petroleum gas (3 per cent).

The country’s chief economic adviser Kaushik Basu had last month said he expects the hike in fuel prices to lead to one percentage point rise in inflation.

The prices of food articles rose marginally by 0.20 per cent during June as prices of cereals, rice and wheat declined on a month-on-month basis.

Among manufactured items, wood products prices rose by 5.4 per cent due to higher rates of plywood commercial planks.

Food inflation remained in double digits at 12.63 per cent for the week ended June 19, having moderated from over 16 per cent level in the preceding eight weeks.

Among primary (raw) food items, urad turned costlier by 9 per cent, meat by 7 per cent, fish—marine (5 per cent) and spices (3 per cent).

The double digit inflation may put pressure on RBI to raise key policy rates to tighten money supply at its July 27 monetary policy review. The central bank has already raised rates thrice this year to combat high inflation.

Analysts said July figures are likely to be higher, as the hike in the prices of petroleum products would be reflected fully.

The government on June 25 had hiked petrol prices by Rs. 3.5 a litre while deregulating its pricing, and diesel by Rs. 2 a litre. Besides, it raised prices of LPG (cooking gas) by Rs. 35 a cylinder and kerosene by Rs. 3 a litre.

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