Speaking to newspersons here, Mr Chidambaram said an increase in the retail prices of petrol would be inflationary in the short-run. Mr Chidambaram said it was difficult to say whether the inflation rate has peaked, but a bountiful crop of wheat and rice will have a moderating effect on food prices. He said there is still scope for cement manufacturers to cut prices.
''There are no signs of a decline in inflation rate so far. The government will control inflation over a period of time,'' Mr Chidambaram said.
''One of the reasons for inflation rate not coming down is the relentless price rise of crude oil. This crude oil price determines most parts of inflation. Unless there is decline in crude oil prices, it is difficult to reduce prices,'' he said.
The Finance Minister said prices of items produced in India is moderate. However, for products globally procured, prices are rising.
We will take more measures if needed.
Data put out by the government on the Wholesale Price Index rose 8.1 per cent in the week ended May 17 from a year earlier, as compared to 7.82 per cent during the previous week.
Mr Chidambaram noted that inflation accelerated to the fastest since September 2004 adding that the government will do all within its means to bring down prices.