UPDATE 2-Vietnam cuts fuel prices by up to 5.3 percent

(Recast to add consumer, analyst quotes, details)

By Nguyen Nhat Lam

HANOI, Aug 14 (Reuters) - Vietnam cut retail petrol prices by up to 5.3 percent from Thursday, taking advantage of a retreat in world oil prices to reverse some of last month's inflation-boosting 40 percent increase.

The country, Asia's second largest importer of petrol and diesel, has been battling inflation running close to 30 percent, triple the levels seen in October last year.

"The reduction in pump prices would not have a big impact on inflation but overall it is a good story as it would spur consumer spending in the short run," said Thio Chin Loo, a strategist at BNP Paribas in Singapore.

The most popular 92-octane petrol grade now retails at 18,000 dong ($1.09) per litre, down 5.3 percent, while 95-octane grade has been cut 4 percent to 18,500 dong ($1.12) per litre, the ministry announced at a briefing on Thursday.

Diesel was left unchanged at 15,950 dong per litre, the country's top importer and retailer Petrolimex said in its price list.

Importers, which are all state-owned, said even at the lower prices they would still make a profit of about 4,500 dong per litre of the 92-octane petrol thanks to the 20 percent fall in crude oil CLc1 from its record high in July.

For a table of state-regulated Asian fuel prices, click on [ID:nSP37494]