Inflation rose marginally to 8.31 per cent for the month ended February, driven by high food and fuel prices, which may prompt the RBI to hike interest rates when it reviews the monetary policy later this week.

However, Finance Minister Pranab Mukherjee expressed hope that inflation should come down to 7 per cent by next month-end.

"By March-end, it would be possible to have around 7-7.5 per cent (inflation)," Mukherjee told reporters in the Parliament House complex.

Monthly fluctuations in inflation do not give a correct picture, he added.

The inflation rate stood at 8.23 per cent in January this year, whereas it was 9.42 per cent in February last year.

The rise in inflation was mainly on account of higher milk, edible oil, vegetable and fruit prices. In addition, high fuel prices on account of soaring international crude oil rates also contributed to inflation.

Hit by the tsunami in Japan, crude oil prices have eased to USD 99 per barrel on expectations of lower demand. This will also result in cooling of commodity prices globally.

During February, food inflation, which accounts for over 14 per cent of overall wholesale price index (WPI) inflation, stood at 10.65 per cent on year-on-year basis.

As per the WPI data, the prices of primary articles -- food, non-food articles and minerals -- shot up by 14.79 per cent on an annual basis, official data released here showed.

However, prices of certain food items declined on a year-on-year basis.

While wheat became cheaper by 1.67 per cent, pulses prices fell by 5.10 per cent and rates for potatoes by 11.28 per cent.

On a monthly basis, prices of jowar rose by 9 per cent, arhar by 7 per cent, barley 4 per cent, mutton by 3 per cent, and wheat by 2 per cent, while milk, maize and poultry chicken became 1 per cent more expensive.

However, fruits and vegetables became cheaper by as much as 20 per cent, while spice prices dropped by 4 per cent, eggs by 2 per cent and rice by 1 per cent.

With inflation showing no signs of moderation, it is widely expected that the RBI may raise key policy rates by 25 basis points at its monetary policy review on March 17.

The RBI may raise key policy rates by 25 basis points to prevent food inflation from spilling over to the manufacturing sector, Crisil Chief Economist D K Joshi said.

During the month, fuel and power prices went up by 11.19 per cent, driven mainly by a 28.73 per cent rise in petrol prices and a 14.99 per cent jump in cooking gas (LPG) rates on an annual basis.

On a monthly basis, prices of aviation turbine fuel rose by 7 per cent and furnace oil and petrol by 3 per cent each, while naphtha became 2 per cent more costly.

At the same time, the manufactured goods group index rose by 4.49 per cent on an annual basis. Manufactured items have the highest weight of 64.9 per cent in the WPI.

Edible oil prices hardened by 11.44 per cent on an annual basis, basic metal and metal products by 8.61 per cent and iron and steel by 9.53 per cent, while cement prices remained almost stagnant.

On a month-on-month basis, prices of soyabean oil moved up by 8 per cent and wheat flour (atta) by 5 per cent, while vanaspati, powder milk and mustard oil prices rose by 3 per cent each.

However, the prices of tea leaf (blended) eased by 14 per cent, groundnut oil by 3 per cent and ice cream and sugar by 2 per cent each.

Meanwhile, the WPI numbers were revised upward to 9.41 per cent for the month of December, compared to a provisional 8.43 per cent announced earlier.

ICRA economist Aditi Nayar, too, said the RBI may go for a hike in interest rates.

"We continue to expect that the RBI may increase repo and reverse repo rates by 25 basis points in the upcoming mid-quarter policy review," she said.