Malaysian leader promised Thursday that gasoline prices won't be further raised this year after a staggering 41 percent increase last week that sparked public protests.
Prime Minister Abdullah Ahmad Badawi said the Cabinet has decided to keep gasoline prices fixed at the current level this year even though global oil prices had breached US$130 a barrel and may spike further.
The decision also took into consideration that consumers are still adapting to an era of high fuel prices following last week's increase, he said.
"The Cabinet has decided that there will not be any further increases in gasoline and diesel prices this year," Abdullah said in a statement.
The pump price of gasoline was raised from June 5 by 41 percent to 2.70 ringgit (US$0.87) a liter, or 10.23 ringgit (US$3.30) a gallon. Diesel prices shot up 63 percent to 2.58 ringgit (US$0.80) per liter.
Like other Asian nations, Malaysia says fuel subsidies are no longer tenable amid rising world oil prices. The government has said its fuel subsidy bill could soar above 56 billion ringgit (US$17 billion) this year, straining public finances.
The energy price hike is a politically risky move for Abdullah, who is fighting for his political survival after his ruling coalition's shock election losses in March.
There has been sporadic protests nationwide and opposition groups have called for a mass demonstration next month to urge the government to reverse its decision.
Still, despite the increase, Malaysia's gasoline prices remain lower than other Asian nations such as Singapore, Thailand and India. In addition to the fuel hike, Malaysia also raised electricity tariffs from July by as much as 26 percent for some consumers.
Abdullah has said the revised energy prices would save the government 13.7 billion ringgit (US$4.4 billion; 2.9 billion), part of which will be used to help subsidize rising food prices.
