New Delhi: Stage is set for prices to rise further. The Central government is likely to allow the export of at least two critical agricultural items.

The decision that could be taken for sugar and onion export has excited the commodity speculation markets already. This, when the Prime Minister’s Economic Advisory Council (PMEAC) put a question mark on the government strategies to tackle inflation. It has emphasized that inflation should be brought down to 4-5 per cent at any cost.

As soon as the Empowered Group of Ministers discussed the export of sugar and onion, the impact was felt in the commodity speculation markets. Sugar prices picked up as report emerged about its possible export nod.

Various industry bodies have been pressing the government to allow the export of sugar. Indian Sugar Mills Association has asked permission to export an extra 10 lakh tonnes.

Diesel may be costlier

If inflation is tamed and falls to 6 per cent, the government could de-regulate diesel prices.

PMEAC has recommended the same in his report on Monday. Its chief, Dr C Rangarajan has expressed dissatisfaction with the existing system of petroleum subsidies. Replying to a question while presenting the report, Rangarajan suggested that diesel too could go the petrol way if inflation is controlled.