Lack of fuel policy causing India's rising inflation?

An inflation reading of 4.5% y-o-y is expected amid uncertainties.

Here's from DBS Group Research: 

The lack of clarity on fuel policy has added to uncertainties and will continue to add pressure on headline inflation. Since the beginning of the year, several plans have been mooted and abandoned by the government due to various reasons. In April, a widely expected 30% fuel price increase failed to materialize on the back of widespread street protests. Instead, a mechanism was put in place such that the government would be allowed to increase fuel prices only if the rolling 6-month average oil price stays 15% higher than the budgeted USD105/bbl.

This condition can be triggered in the coming two months if oil prices hover around USD120/bbl, but it is still not clear if parliamentary approval is needed to push through with price hikes. More recently, there was another plan to restrict the sale of subsidized fuel to cars with engine size below 1,500cc. But this plan also appears to have been delayed when it was originally scheduled to come into effect in May. Policy uncertainties will lead to elevated inflation expectations and there have been indications that some prices have been rising in anticipation of a potential fuel price adjustment in the near future. As long as a decision is not made, we think that there will be an added upward drift in prices in the coming months.

For April, an inflation reading of 4.5% YoY  is expected. Broadly speaking, inflation has already bottomed out in 1Q. The extent of the uptrend for the rest of the year will depend largely on the policy decisions by the government. Given uncertainties in the government's policies, our core scenario assumes no fuel pricehike for the rest of the year and we also see inflation averaging a benign 4.7%.