Bangladesh's caretaker government raised fuel prices by 7-9 taka (1 U.S. dollar equals to about 68 taka) with effect from Monday, saying that the adjustments were an imperative following growing international market rates and continuous financial losses on account of subsidies from the exchequer.

Energy Advisor of Bangladesh's caretaker government Tapan Chowdhury on Monday was quoted by local news agency UNB as saying that the government was "compelled" to raise the petroleum prices in view of the current realities. He, however, admitted that the enhancement in fuel prices would push the inflation up and there would be some negative effects on other sectors.

"I think, the inflation will go up to 7 percent from 5 percent and definitely there will be effects ..." he told reporters at a press conference at the Energy Ministry on Monday, announcing the price hike.

According to Bangladesh Bank, the central bank, the rate of inflation in the country is just below 7 percent at present.

The prices of diesel and kerosene have been increased by 7 taka to 40 taka per liter from the existing rate of 33 taka while that of octane and petrol by 9 taka to 67 taka and 65 taka per liter respectively.

The energy advisor said the government would try its best to check the cascading negative impacts of the oil-price hike on other sectors of the economy.

"We'll contain the inflationary growth through market monitoring and other measures," he said.

But the energy advisor didn't elaborate what kinds of measures to be taken to contain the inflation likely to be stoked up.

Tapan Chowdhury said the government would keep a provision in the coming national budget for providing subsidy to the farmers to offset the impact of the price rise of diesel on their productive activity.