Inflation hits 9-month low on falling fuel prices

India's inflation, based on the wholesale price index (WPI), fell sharply in the first week of this month after the Government cut fuel prices for the first time since Feb 2007 in the wake of the steep fall in crude oil prices from a record US$147 a barrel in July. The annual, point-to-point inflation stood at 6.84% in the week ended Dec. 6 as against 8% in the previous week, the Commerce & Industry Ministry said. Inflation was expected to decline to around 7.5%, according to economists. It had touched a 16-year peak of nearly 12.91% on Aug. 2 and was at 3.84% in the comparable period last year. The WPI for "All Commodities" declined by 1.1% to 231.1 in the first week of December. The index for Primary Articles dropped 0.4% to 249 while the index for Manufactured Products declined by 0.3% to 202.4. The index for Fuel & Power was slid 3.7% to 332.1 due to a steep decline in the prices of naphtha (23%), furnace oil (15%), bitumen (11%), petrol (10%), aviation turbine fuel (7%), high speed diesel oil (6%), light diesel oil (5%) and lubricants (4%). The rate of inflation, based on average monthly WPI, which was 10.97% for the month of October has eased by 2.31% to 8.66% in November, the Commerce Ministry said. The annual rate of inflation for Food Articles group stood at 10.19% for the week ended Dec. 6 compared to 10.52% in the previous week. It was 2.51% as on Dec. 8, 2007. Meanwhile, the Government revised the inflation rate for the week ended Oct. 11, to 11.30% from the provisional estimate of 11.07%, while the WPI for the same period stood revised at 239.3 versus 238.8 forecast earlier.