Data released by the Government showed the inflation rate, measured by the wholesale price index, rose to 3.01 per cent in the week ended November 6, from 2.78 per cent in the previous week.

The rate has risen above 3 per cent for the first time since the week ended June 12, when it was 3.0 per cent. Analysts said the rise in the inflation rate was fuelled by October's increase in diesel prices.

"Since October this year, inflation has been rising because of the hike in diesel and kerosene prices," said Aashish Pitale, head of research at JP Morgan.

"Going forward, we see inflation figures rising sharply and by March-end, we expect it to be in the region of 5.5-6.0 per cent," he said. Diesel prices were raised by 40 per cent in the first week of October.

Analysts said any fresh increase in diesel priceswould push up the inflation rate further. Petroleum minister Ram Naik said last week that the Government would review the rise in diesel prices in November-end. "October prices have gone up. We have to take a decision by the end of this month," Naik told a conference of economic editors. Oil prices are currently at nine-year highs.