Vietnam wants to reduce its subsidies for the oil sector
Vietnam has raised petrol prices by 31% and domestic fuel prices by as much as 36% as it seeks to reduce state subsidies for the commodity.
A litre of commonly used 92 octane petrol is now sold for 19,000 dong ($1.15), up from 14,500 dong per litre, according to importing firm Petrolimex.
The rise will put prices in Vietnam, which depends heavily on oil imports, more in line with the rest of Asia.
Energy prices have been rising worldwide, adding to inflation worries.
The latest move by the Vietnamese government reverses its promise to leave prices unchanged to the end of the year.
According to a recent report from the Asian Development Bank, the threat of high inflation could undo the economic progress made by Vietnam in the past 20 years.
Vietnam has been hit by soaring inflation and a widening trade deficit.
"It makes sense for fuel prices to go in line with world oil prices but as a result inflation will remain on the rise," said economist Tai Hui, from Standard Chartered in Singapore.