COLOMBO, Jan 1: Sri Lanka is set to raise the prices of basic foods such as potatoes and sugar as well as cooking gas, officials announced on Tuesday, fanning fears of galloping inflation in the conflict-wracked island.

Inflation is already running at 17.5 per cent in the tropical country, whose economy has been slowing amid an escalating war between government forces and Tamil rebels fighting for an independent homeland.

LPG used for cooking was slated to rise by nearly 12 per cent on Wednesday, the Royal Dutch Shell company said, blaming the increase on high global prices.

Import duties on sugar, potatoes, canned fish and lentils were to be raised by 15 to 30pc on Wednesday, the trade ministry said.—AFP