Tube and bus passengers could be hit by fare rises of more than 7% in 2011, the London Assembly has been told.
Transport for London (TfL) told the assembly that high inflation is affecting its costs and some of that may need to be passed onto passengers.
TfL confirmed it is likely to recommend to London's mayor that 2011 fares should rise by 2% above inflation.
Based on the current Retail Price Index (RPI) of 5.1%, this would mean a 7% rise in fares.
Mayor Boris Johnson will make a final decision on fare increases, which is expected in the autumn.
The decision is usually based on the RPI figure in July, an assembly spokesman said.
A TfL spokesperson said: "As we made clear in October last year while there is no set formula by which fares are decided, TfL's planning assumption will be that fares will rise RPI +2% each year.
"However, the actual level of fares will be decided by the mayor later in the year.
"No decisions have been made yet."
John Biggs, Chair of the Budget and Performance Committee said: "Londoners have already been hit by a hike in fares this year, particularly bus passengers, who bore the brunt of the rises."
"We are looking at how the existing fare increases have already affected passengers in the capital and we will also assess whether further rises on the scale suggested today by TfL can really be justified."
In 2010, average Tube fares have gone up by 3.9% and bus passengers faced a 12.7% rise.