Malaysia protesters begin march over fuel hikes

Hundreds of Malaysians began a march in the capital on Friday, demanding the government withdraw a steep hike in fuel prices or resign, in the biggest protest yet against Prime Minister Ahmad Abdullah Badawi's coalition.

"Down with PM, long live the people," the protesters shouted as they left a mosque after prayers in a poor part of Kuala Lumpur and headed to the iconic Petronas Towers in the city centre to underline anger against the state energy giant.

Hundreds of police in full riot gear stood guard while a helicopter hovered overheard, reflecting government fears over the protests' gathering momentum.

Malaysia joined India, Indonesia, Taiwan and Sri Lanka in raising pump prices last week, provoking a public outcry in the oil producing country. Soaring global fuel costs have triggered strikes by truckers from Thailand to Spain.

Friday's protest is seen as a major political test for Abdullah, already fighting for his political survival after the governing coalition's dismal electoral performance in March.

Police have urged people not to join the rally, deemed illegal because no permit has been issued, and warned they would arrest protest leaders.

A police officer estimated the number of people involved in the march at 1,000 but organisers said it was much more.

"We are not sure how many protesters will turn up and which routes they will take. But we are taking all precautionary measures," a police spokesman earlier told Reuters.

There are tight restrictions on public gatherings in Malaysia, but the opposition said the people wanted to air their anger.

"The people are angry. They say the fuel price is very high so they want to say something," said Safarizal Saleh, a leader of the youth wing of the Islamist opposition party Parti Islam SeMalaysia (PAS).

Petrol prices were raised by 41 percent and diesel 63 percent in line with a global surge in oil prices, which touched a record $139 a barrel last month. The measure will drive Malaysia's inflation to a 10-year high of 4.2 percent in 2008.

"Chief ministers and ministers' have huge pay packets and the government pays for their petrol. So they do not understand the sufferings of the rural folk," Nik Aziz Nik Mat, the spiritual leader of PAS and chief minister of the northeastern state of Kelantan, told Reuters in an interview.

NO MORE HIKES

The government says it will save 13.7 billion ringgit (2.2 billion pounds) as part of a broad overhaul of its heavily subsided energy pricing system.

Trying to assuage public anger, Prime Minister Abdullah has said there will not be any more fuel increases this year and announced a cut in the allowances of ministers as part of measures to curb government costs.

But critics, led by former Deputy Prime Minister Anwar Ibrahim, have rejected the measures as too little and questioned why Malaysia, the largest net oil exporter in Asia, should face the fuel hike when the country earns 250 million ringgit a year in revenue for every $1 rise in crude prices.

"Although Petronas is estimated to have earned 2 trillion ringgit over the last 34 years ... its accounts are not accessible to (the) public nor by the people's elected representative in Parliament," said Waytha Moorthy, chairman of HINDRAF, a group campaigning for the rights of ethnic Indians which is supporting the fuel protests.

Petronas posted a record profit of $12.9 billion (6.6 billion pounds) for the year ended March 31 2007, helped by a boom in crude oil prices. The state oil firm is expected to release its 2008 earnings at the end of June.

On top of higher fuel costs, the government, like its counterparts in the region, is also battling the spiralling cost of food by trying to lock in supplies of rice.

Abdullah was due to launch a programme later on Friday in Kelantan to step up rice production. Malaysia meets nearly 70 percent of its rice demand from domestic production.