New Delhi: The Finance Ministry had cautioned the Cabinet about the effect of raising fuel prices on India's inflation, Finance Minister P Chidambaram said here on Friday soon after inflation reached 11.05 per cent. He also hinted at stronger monetary measures.

As inflation for the week ended June 7 hit a 13-year high, Chidamabaram told reporters, "The increase in petroleum product prices has contributed 94 per cent to the inflation recorded."

The Central government had on June 4 raised petrol prices by Rs.5 a litre, diesel by Rs.3 and cooking gas by Rs.50 a cylinder. "Double digit inflation was expected after the government decided to increase fuel prices," Chidambaram said. "We had cautioned the Cabinet about this."

The finance minister said, "It's a difficult time. More strong monetary measures are needed. The government is aware of the difficulties."

Source : IANS