Vietnam increased retail prices for gasoline by 31 percent and kerosene by 44 percent after the cost of oil surged, the government said.

The price of 92-RON gasoline, the most common grade used in the country, was raised to 19,000 dong ($1.14) a liter from 14,500 dong and that of kerosene to 20,000 dong from 13,900, the Ministry of Finance and the Ministry of Industry and Trade said in a statement. The increases are effective from today.

Benchmark crude oil in New York reached a record $147.27 a barrel on July 11. Prices have risen about 35 percent this year. Vietnamese importers of petroleum products have lost about 14.5 trillion dong in the first six months because of rising international oil prices, Finance Minister Vu Van Ninh told reporters in Hanoi today.

``If we don't allow state-owned retailers to raise prices, the loss may increase to 70 trillion dong for the whole year, which will be a cost burden for the state budget,'' Ninh said.

Vietnam's trade deficit climbed almost threefold to $14.8 billion in the first half 2008, spurred by demand for raw materials and machinery as global prices soar.

Crude oil for August delivery rose as much as $1.25, or 1 percent, to $130.13 a barrel on the New York Mercantile Exchange. It was at $129.67 at 1:19 p.m. in Singapore.

Vietnam's VN Index, a measure of 153 companies on the Ho Chi Minh City Stock Exchange, plunged more than 2.5 percent today, the biggest one-day drop since March 25. The benchmark has declined 49 percent this year.

``Investors are worried that the increase in fuel prices will boost input costs and bring down corporate earnings,'' said Hoang Thach Lan, chief analyst at Ho Chi Minh City-based SME Securities Co.