Goods won’t cost you more

NEW DELHI: Despite what politicos may like to believe, prices of goods would not spiral up because of this week’s increase in diesel and petrol prices. Instead economists estimate the impact would be less than 1% on the wholesale price index (WPI).

The fuel, light and lubricants group, has a weightage of 16% in the WPI, the bellwether weekly inflation indicator. Economists are clear that it would be the diesel prices which would impact the price level. Principal adviser, Planning Commission, Pronab Sen, said the petrol price hike was somewhat like a tax on consumption. There would be no further round of price increase because of it, he said.

Saumitra Chaudhuri, member of the economic advisory council to the Prime Minister, also agreed with the optimistic price line scenario. He estimated that the WPI would rise only 80 basis points to less than 5.5% because of the petrol and diesel price rise. Though the latest WPI level is 4.74% as on May 20, Chaudhuri said it would take time for the rise in diesel prices to create an impact on the price level.