Petrolimex, Vietnam's top fuel importer and distributor, raised its retail petrol prices on Wednesday by up to 4.3 percent after the government allowed fuel distributors more freedom to set sales prices independently.
State-controlled Petrolimex increased the price of 92-octane petrol to VND21,900 ($1.05) per liter as of 0700 GMT, while diesel with 0.05 percent sulphur content was up 2.5 percent to VND20,800 per liter, the firm said in a statement. Its last increase was on July 20.
Wednesday's move came after a Finance Ministry announcement earlier in the day repeating its ruling of July 20 which gave oil products distributors the power to set their retail prices and the timing of changes to prices, in line with a government decree issued in 2009 but not enforced fully since then.
The price rise on Wednesday, plus the one in July, are likely to contribute to higher inflation, and some consumers worry the higher prices will squeeze household budgets.
The import duty on oil products remained unchanged, the finance ministry said in a document signed by Price Management Department director Nguyen Tien Thoa and seen by Reuters.
"Businesses are allowed to make their decision but they cannot decide as much as they like," Thoa told state-run Vietnam Television in an interview.
"In regards to petrol and oil products... the state still retains a relatively tight control," he said in the broadcast.
Vietnam has 13 oil products distributors, of which three -- Petrolimex, PV Oil and Saigon Petro -- account for a combined 90 percent of the market.
In July, Vietnam's consumer price index eased 0.29 percent from June, the second monthly fall in a row, while the annual inflation of 5.35 percent in July was the lowest since November 2009, government data show.