The move comes as an attempt to reduce an energy budget deficit that has widened due to soaring world prices, the government said.

The prices of lead-free petrol and two star petrol rose to 1.15 dinars ($0.890) per litre from 1.10 dinars.

A previous increase was announced in early July.

The government has budgeted 450 million dinars ($348.6 million) to subsidise domestic oil prices this year.

This increase in petrol prices is the seventh since February 2005.

Tunisia, an exporter, is also producing oil, covering 46% of its needs.

A $1 rise in imported oil prices adds 35 million dinars to the annual energy subsidy budget, officials said.

PIN/ARAB ONLINE