NEW DELHI, Jan 18: India’s annual inflation hit its highest level in four months on Friday as the country braced for increased fuel prices, diminishing chances of any early interest rate cut, economists said.

Inflation quickened to 3.79 per cent for the first week of January from 3.50 per cent a week earlier and 6.37pc in the same period the previous year, according to the wholesale price index, India’s main cost-of-living monitor.

The data came as ministers were expected to meet on the weekend to decide on a hike in state-set fuel prices to cope with a surge in global fuel costs that have led to huge losses at publicly owned oil companies.

“Our endeavour is that consumers should not be burdened too much and oil companies losses are taken care of,” Petroleum Minister Murli Deora said.

The coalition government of Congress Prime Minister Manmohan Singh is wary of raising fuel prices too sharply because it fears alienating voters with 16 months to go before the next election, analysts say.

Inflation has stayed well below the central bank’s ceiling of close to five per cent for the fiscal year to March 31, 2008. But analysts expect the inflation rate to rise further in coming weeks on the back of the expected increase in state-set fuel prices.—AFP