"The rise in domestic fuel prices might impact inflation but we will take mitigating measures to keep it under check," the official said.
Inflation has shown a rising trend in the last past few weeks as it rose to 4.74 per cent for the week ended May 20 from 4.32 per cent in the previous week.
The government has increased petrol prices by Rs 4 per litre and diesel by Rs 2 per litre on June 5 to save PSU oil firms who were incurring heavy loss as global crude prices are ruling at high levels for a long time.
However, the increase in fuel prices may affect common man as prices of essential items are likely to go up due to higher transport costs. The finance ministry official said high oil prices is a matter of concern for the economy.
The ministry will also try to keep interest rates reasonable for investment activities in order to achieve over 8 per cent growth in this fiscal.