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Vietnam hikes petrol prices by over 30pc

AFP, Hanoi
Communist Vietnam hiked retail petrol prices by more than 30 percent Monday to pass on high global oil costs, state media reported, a move likely to further accelerate double-digit inflation.
The cost of a litre of standard petrol (gasoline) was raised to 19,000 dong (1.15 dollars) from 14,500 dong, the ministries of finance, industry and trade, and information and communication, said at a joint press conference.
State-run Petrolimex also raised diesel to 15,950 dong from 15,000 dong per litre, and fuel oil to 20,000 dong from 13,900 dong per litre, the state-controlled Dan Tri online newspaper reported.
Finance Minister Vu Van Ninh said the decision aimed to help state-owned fuel importers, which have faced high global energy prices. Oil traded at around 130 dollars a barrel on international markets Monday.
Vietnam is battling one of Asia's highest inflation rates. Prices rose at an annual rate of 26.8 percent in June, driven mainly by sharply higher food and energy costs.
The latest hike comes even though Deputy Industry and Trade Minister Bui Xuan Khu said in a statement earlier July that Vietnam would not raise fuel prices for the rest of the year.
Vietnam's economy grew at 8.5 percent in 2007, and its energy needs are rising annually at about twice that rate, say experts.
The country has offshore oil and gas reserves in the South China Sea but lacks a functioning refinery and has to import its refined petroleum products.
Dung Quat, a 2.5-billion-dollar refinery, is now being built in central Vietnam after lengthy delays and is expected to produce 6.5 million tonnes a year from 2009 -- equivalent to a third of the country’s needs.
Prime Minister Nguyen Tan Dung on a weekend inspection visit urged investors and contractors to put the Dung Quat oil refinery project into opera-
tion by February 2009 as scheduled, the state-run Vietnam News Agency reported.
Truong Quang Tuyen, deputy general director of the Vietnam Oil and Gas Group (PetroVietnam) and head of the Dung Quat Oil Refinery Project Management Board, said by mid-July more than 95 percent of construction had been completed.
Contractors and subcontractors had mobilised more than 11,000 workers for regular work at the construction site, he was quoted as saying.
Fuel costs have surged worldwide due to the high cost of crude oil.
The rise has led to protests worldwide, ranging from tens of thousands of truck drivers striking in Spain and Portugal, to street rallies throughout Asia over hikes in subsidised energy costs.