SPI inflation rises 1.21pc as fuel price hike takes toll

KARACHI: After staying muted for two weeks, weekly inflation jumped 1.21 percent week-on-week and 12.94 percent year-on-year during the seven-day period ended October 7, as government raised fuel rates to absorb hike in international prices and exchange rate variation.

Inflation report released by the Pakistan Bureau of Statistics (PBS) attributed the WoW change to increase in prices of chicken (17.12 percent), LPG (7.73 percent), potatoes (5.89 percent), garlic (3.70 percent), petrol (3.20 percent), tea lipton (1.98 percent), wheat flour bag (1.97 percent), washing soap (1.94 percent), gur (1.84 percent), tomatoes (1.83 percent), mustard oil (1.60 percent) and diesel (1.59 percent). The joint impact was 1.28 percent in overall SPI for the combined group.

The price of 11.67kg LPG cylinder increased by Rs152.28 to Rs2,123.35 during the week, up from Rs1,971.07 last week. The increase was Rs847.97 from last year, when LPG was available for Rs1,275.38/cylinder.

Petrol is now available for Rs128.23/litre, compared to Rs124.25/litre last week, and Rs104.92 during the same week last year. HSD price stands at Rs123.03/litre, up from Rs121.10/litre last week and Rs105.04/litre during the same week last year.

SPI for the groups spending up to Rs17,731; Rs17,732-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175 showed an increase of 0.88, 1.03, 1.08, 1.17, and 1.31, respectively. The highest impact of an increase of 14.24 percent YoY was suffered by the first quintile. For the week under review, SPI was recorded at 158.94 points against 157.04 points registered previously.

Ismail Iqbal Securities said inflation surged 1.2 percent WoW after remaining muted for two weeks due to increase in prices of fuels and edibles.

SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country. It comprises of 51 essential items and the prices are collected from 50 markets in 17 cities of the country.

During the week, prices of 22 items increased, 8 decreased, while prices of 21 items remained unchanged.

PBS data attributes different weightages to the commodities in the SPI basket. The commodities with the highest weightages for the lowest quintile include milk (17.5449 points), electricity (8.3627 points), and wheat flour (6.1372 points).

Milk and wheat flour both registered a WoW increase, whereas electricity tariff has also increased multiple times during the year.

The year on year trend depicts increase of 12.94 percent, with prices of electricity for Q1 up 57.92 percent, chicken 52.28 percent, vegetable ghee 1kg 40.87 percent, mustard oil 39.90 percent, vegetable ghee 2.5kg 39.34 percent, cooking oil 5 liter 37.97 percent, chili powder 33.43 percent, gents sandal 33.37 percent, washing soap 25.21 percent, gents sponge chappal 25.13 percent and petrol 22.22 percent.

Power consumers are now paying Rs6.38/unit on account of devaluation of rupee against dollar, up from Rs4.06/unit during the week ended October 8, 2020, PBS data showed.