Pakistan, Vietnam cut fuel prices; India holds on

By Himangshu Watts

NEW DELHI (Reuters) - Pakistan cut gasoline prices on Tuesday following a similar move by Vietnam as global crude oil prices fell to seven-month lows, but India said it would follow suit only if crude oil prices fall further.

U.S. crude was down 4.5 percent at $91.2 a barrel at 1300 GMT on concerns turmoil in global financial markets would further erode fuel demand and send investors into safer havens.

Crude oil's rapid retreat from its peak above $147 a barrel two months ago encouraged Pakistan to cut petrol prices by 5.8 percent, although it raised diesel prices by 6.2 percent to trim the cost of its subsidies.

Vietnam, Asia's second-largest importer of petrol and diesel, cut retail diesel prices by 2.8 percent on Tuesday. Petrol prices, which were cut by 5.6 percent on Aug. 27, were not changed.

But India, Asia's third-largest oil consumer, will wait for crude oil to fall much further before it cuts fuel prices, oil minister Murli Deora said.

India had raised fuel prices by 10 percent in June, a moderate response to crude oil's record run compared to Vietnam which raised rates by more than a third, and Pakistan where prices were raised several times this year.

"We welcome reduction in oil prices but still public sector companies are losing money. The day when the prices (of crude oil imported by India) fall to $67 per barrel, it can be considered," Deora told reporters.

The Indian minister said the fall of the Indian currency was partly offsetting the gains of cheaper crude as the rupee cost of oil was increasing.