Argentina's YPF opens new diesel refinery

BUENOS AIRES Aug 9 (Reuters) - Argentina's state-controlled oil company YPF on Thursday opened a diesel fuel refinery expected to produce 1.75 billion liters per year as part of its plan to increase energy production in the South American country.

The government seized control of YPF from Spain's Repsol earlier this year, accusing it of under-investing in Argentine production.

The new plant, near the city of La Plata, cost 1.4 billion pesos ($304 million). President Cristina Fernandez said it will save on the country's fuel import bills by increasing Argentine diesel output by 13 percent.

Fernandez also said her government had reached agreement with oil companies and gas stations to pay more at the wellhead for compressed natural gas. The measure seeks to increase investment needed to overcome the country's energy deficit.

The president said the cubic meter price will rise to 0.6 pesos from 0.15 pesos, which should increase revenue of producing companies by almost 1 billion pesos, Fernandez said.

($1 = 4.6 Argentine pesos )

(Reporting by Nicolas Misculin, Writing by Hugh Bronstein, Editing by Lisa Shumaker)