Last week, amid US-Iran tensions, oil prices briefly rose to $70 in the international markets. Even as prices have eased now, they remain higher when compared to the last year, causing economists to feel that India's already surging inflation could go climb further.
According to the median estimate of 36 economists surveyed by Bloomberg, price-growth probably accelerated to 6.7 percent in December from 5.5 percent in the previous month.
Data on Consumer Price Index (CPI), a measure of retail inflation in the country, for the month of December, is scheduled to be released on Monday, while Wholesale Price Index (WPI) data will be out on Tuesday.
CPI is expected to breach the upper end of the Reserve Bank of India's 2-6 percent target band for the first time since July 2016.
In December, when RBI kept its key interest rate unchanged after its monetary policy review, it cited "much higher than expected" inflation for its decision.
When costs of vegetables to mobile phone services have been climbing, RBI will not be able to stick to its easing lending cycle to push growth.
Last week, Governor Shaktikanta Das said that price stability is the central bank's primary objective as continuing high inflation disproportionately affects the poor.
RBI's next monetary policy review is scheduled for 6 February, a few days after Finance Minister Nirmala Sitharaman presents the Union Budget in the parliament for the financial year 2020-21.