Hungary's MOL has raised its bid for a government stake in Poland's top oil refiner PKN Orlen against a rival offer by Austria's OMV, sources said yesterday, raising the stakes in the race for primacy in central Europe's oil refining sector.

The Hungarian oil and gas group increased its offer for the 17.6 per cent stake in PKN Orlen to 30 zlotys ($7.1) per share, a 60-per cent premium to the market price, a source close to talks told Reuters.

"The MOL offer was increased last week to 30 zlotys per share from a previously offered 25 zlotys," the source said.

The stake - worth 2.2 billion zlotys ($518 million) according to MOL's new bid price - is also coveted by Austria's cash-rich OMV, which market sources said last week had also initially bid around 25 zlotys per PKN's share.

It is not clear whether the Austrian group has also increased its offer since. MOL declined to comment on its offer and OMV was not immediately available for comment.

Both bids for the government's stake in PKN were comfortably above the price of the Polish refiner's initial public offering back in November 1999 at 19.5 zlotys per share.

The state agency in charge of selling the stake said talks were continuing with both bidders and a preferred offer would be chosen within days. The state treasury wants to seal the deal by September 23 general elections, which the incumbent government is set to lose to the leftist opposition.

The opposition Democratic Left Alliance (SLD) has said they would revise the sale and could seek to annul the sell-off if they find it hurting Poland's chemicals industry, which depends heavily on PKN Orlen's petrochemical business.