LAHORE - The CPI-based inflation for July 2012 is estimated to be at 10.9 per cent, experts said.The price indices for the month of July 2012 are expected to be released in the upcoming week and it is estimated that Consumer Price Index (CPI) will be 10.9% YoY in July-12, 0.38% lower than Jun 2012 figure of 11.28% YoY, experts observed in a report. According to them, the Sensitive Price Index (SPI) presented a continuous weekly rise in July 2012 projecting increase of 0.64% in the week ended on 19th July 2012. However, it is believed the monthly overall inflation is mainly food prices driven. They said that overall inflation in July 2012 prices, with the advent of Ramazan, was ignited by food prices that surged in most parts of Pakistan. Since first three weeks of July have witnessed a marginal increase in SPI, experts believe that increase in food prices is more of a temporary effect and will likely fade away post Ramazan. Although the government has proposed Rs2.5 billion subsidy on commodities at the Utility Stores to consumers but still austere measure remain to be taken to curtail overall inflated prices in the market. In the last week of Jun 2012, international oil prices have shown quite fluctuation remaining mainly on the lower end, averaging at USD 93.85/ bb. Consequently, a decline was seen in local POL product prices as it was evident from a PKR 4.5 decrease on petrol in the beginning of July however it was revised slightly upward (Rs 0.91 effective from mid of the month). As per experts analysis, oil and inflation are positively correlated, thus major change in domestic petroleum prices will consequently provide cushion to the overall CPI.As July 2012 marked beginning of the holy month of Ramadan, going forward, it is likely that prices of food items will remain on the higher side in the month of August. Thus, the full impact of these inflated prices will be evident in the CPI of August which may translate into a rise in CPI.