Inflation: The important role of food and crude oil in rising inflation, revealed in the report of the Finance Ministry

New Delhi According to a recent report by the Ministry of Finance, the main reason for retail inflation in India is rising food and crude oil prices. Both are largely responsible for the rise in prices. Measures to rein in rising edible oil prices have also brought some relief in May and are expected to […]
 


Inflation: The important role of food and crude oil in rising inflation, revealed in the report of the Finance Ministry

New Delhi According to a recent report by the Ministry of Finance, the main reason for retail inflation in India is rising food and crude oil prices. Both are largely responsible for the rise in prices. Measures to rein in rising edible oil prices have also brought some relief in May and are expected to provide further relief. For the past five months, retail inflation has been hovering above the six per cent limit set by the RBI.

According to a report by the Ministry of Finance, India imports 60 per cent of its edible oil requirement. Retail prices of edible oil rose by 18.7 per cent in March this year compared to March last year as sunflower oil supplies were cut due to the Russo-Ukraine war and increased palm oil prices. After March, the retail price of edible oil rose 17.3 per cent in April this year and fell to 13.3 per cent in May as Indonesia lifted restrictions on palm oil exports and the government reduced duties on oil imports.

According to a report by the Finance Ministry, the sharp rise in crude oil prices has affected the retail prices of food items. The average of Brent crude in April this year was ₹ 105.8 per barrel, which rose to ₹ 112.4 per barrel in May this year. The main reason for this was that the demand for oil increased due to the fall of Corona in China and European countries decided to cut oil imports from Russia by 90% by December. India imports 80 per cent of its crude oil requirement. In such a situation, it will be very important to know how much oil India is able to buy from countries willing to sell oil at cheap prices.