Published August 25, 2008

Fuel price cut not political: Abdullah

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(KUALA LUMPUR) Malaysian premier Abdullah Ahmad Badawi said a recent move to cut petrol prices by 5.6 per cent to RM2.55 (S$1.08) a litre was not politically motivated, according to a report Sunday.

The government's announcement on Friday comes ahead of a crucial by-election this Tuesday contested by opposition politician Anwar Ibrahim in the northern Penang state.

Mr Anwar has promised to cut fuel prices substantially if he is returned to parliament after a decade-long absence and wrests power from the ruling coalition.

'Never mind what people say. If I want to change the policy because I think I have to, I will change it,' Mr Abdullah was quoted as saying by the New Sunday Times newspaper.

'I don't care what the opposition says. I will do it. That's me,' he added.

The government hiked petrol prices 41 per cent in June to rein in the spiralling cost of energy subsidies but the decision sparked angry street protests and triggered calls for him to quit, compounding his woes after disastrous results in March elections.

The government later said that it would review fuel prices periodically from September, with the new price to be fixed on the first day of every month.



However, housing and local government minister Ong Ka Chuan told state news agency Bernama that the Cabinet on Friday has now decided to review fuel prices bi-monthly to be more responsive to fluctuating petrol costs.

'If there is further reduction, the government will announce an adjustment every 15 days based on global crude oil price,' Mr Ong told Bernama.

Mr Anwar has been quick to capitalise on the price cuts saying people should acknowledge his party's stance on lowering fuel prices ahead of the government's decision.

With the price cuts, Mr Abdullah urged traders to pass on the benefits to consumers of a corresponding fall in the price of goods.

Malaysia's inflation rate rose to a new 26-year high of 8.5 per cent in July, driven up by the escalating cost of fuel and electricity.

The central bank says it expects inflation to moderate in the second half of 2008 as economic growth is likely to slow down. -- AFP