A sharp rise in retail petrol and diesel prices since mid-May could add materially to India’s consumer price inflation, Crisil warned, even as the Reserve Bank of India’s Monetary Policy Committee (MPC) may initially look through the supply-side shock. The rating agency estimated the direct impact on the Consumer Price Index (CPI) at roughly 36 basis points for a Rs 7.5/litre increase in fuel costs, rising to about 48 basis points if retail prices climb by Rs 10/litre. Retail fuel surge and inflation mathematics Retail petrol and diesel prices in India have climbed by around Rs 7.5 per litre since May 15 and Crisil said further hikes are possible if crude oil remains elevated. “The direct upside to inflation linked to CPI is estimated at ~36 basis points (bps) with a hike of Rs 7.5/litre in petrol and diesel prices, rising to ~48 bps if the retail fuel prices increase by Rs 10,” the report said.