The new rate, effective of 10am yesterday morning, jumped by VND2,900 (US$0.13) per litre for petrol to VND19,300 ($0.85) by VND3,550 for diesel oil to VND18,300, by VND3,100 for kerosene to VND18,200 and by VND2,110 for fuel oil to VND14,800, said Vuong Thai Dung, deputy general director of the National Petroleum Corporation (Petrolimex).

The ministry has also announced it will stop using the petrol price stabilisation fund.

In the past days, the global wholesale price of A92 petrol has surged to $106.3 per barrel, while crude oil prices have soared to $115-$116 per barrel, the ministry said. (1 barrel equals 159 litres)

Although using all the tools of price stabilisation, including tax reductions for kerosene, diesel and petrol and the stabilisation fund, fuel importers and distributors have suffered huge losses this year.

The dealers said they were losing around VND3,000 ($0.14) on each litre of petrol sold and VND4,000 per litre of diesel and kerosene.

The decision on the increase for petrol and oil prices would stop speculation and smuggling of the products as the local retail prices were lower than those in neighbouring countries, the ministry said.

Yesterday's annoucement marks the highest ever petrol price in Viet Nam, beating the previous high of VND19,000 per litre set in 2008 when the world oil price jumped to $130 per barrel.

In Ha Noi, taxi and xe om drivers queued up to buy petrol before the price increased at petrol stations on Tran Hung Dao, Nguyen Luong Bang and Lang Ha streets.

"I am trying to buy petrol here because at most petrol stations there is a long line of people waiting to fill up before the increase at 10am," said Nguyen Thi Ha, on her motorbike at Tran Hung Dao Street.

Meanwhile, some other motorbike drivers said they weren't suprised about the price increase, but it was the timing that shocked them.

"Of course, we knew that the increase would happen but I'm surprised that it happened today - I thought the price would go up next month," said Nguyen Duc Trung, a motorbike driver.

"I must spend more money buying petrol and in the long term that will be a lot of money for people on motorbikes and in cars," said one driver. "The petrol price increase together with higher electricity prices will force an increase in the price of goods and services over the next few months," he said.

Since 10am, when the new pricing was set, trading of petrol and oil had resumed at normal levels. — VNS.

Source: Vietnamnews.