Yields at 10-week high

Bonds dropped, pushing yields to a 10-week high, on speculation costlier oil may prompt fuel-price increases and stoke inflation.

The yield on the 7.80% note maturing April 2021, the most-traded government security, rose 6 bps to 8.12% in Monday’s trade. The rate was the highest level since February 14.

Crude prices in New York have jumped 24% this year, according to data compiled by Bloomberg. India imports more than three quarters of its oil.

Indian Oil plans to raise gasoline prices at the earliest possible , chairman RS Butola said in New Delhi on Monday. “The possibility of a fuel price increase soon has damped sentiment ,” said Prasanna Patankar, head of fixed-income trading at Securities Trading Corporation of India ( STCI).

The cost of one-year interest-rate swaps rose 3 basis points to 7.83%, the highest level since October 2008.