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Malaysia says no fuel price rises as pressure mounts

Posted: Wednesday, June 11, 2008, 16:03 (BST)
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Malaysia's prime minister ruled out any more increases in fuel prices this year to try to contain growing public anger and pressure over soaring fuel costs mounted on other governments in Asia and Europe.

In the latest protests since a global surge in world crude oil prices, which touched a record $139 a barrel last week, Thai truck drivers staged a half-day strike to seek government help.

Spanish and Portuguese truck drivers pressed on with strikes they began on Monday, blocking deliveries and prompting some consumers to stockpile food and fuel. Spain's car industry said it had been paralysed because of the protests.

Lisbon's main Portela airport diverted airlines to other airfields to refuel, saying it could supply only emergency, military and state flights. Some flights were delayed but none were cancelled, Portugal's airport authority said.

In Asia, where many countries are net crude importers, governments have been forced to cut fuel subsidies and let pump prices climb, putting a squeeze on households already struggling with higher costs of basic food such as rice.

Malaysia followed India, Indonesia, Taiwan and Sri Lanka by raising pump prices last week, provoking a public outcry and protests. On Monday, Nepal became the latest Asian nation to rise prices to stem losses of a state firm.

"The government feels that the people are still trying to adjust to the high oil price situation," Malaysian Prime Minister Abdullah Ahmad Badawi said in a statement.

"As such, the cabinet decided that there will be no further increase in petrol and diesel prices this year."

Malaysia is Asia's largest net oil exporter, earning 250 million ringgit (39.2 million pounds) a year in revenue for every $1 rise in crude prices. Petrol prices were increased by 41 percent and diesel 63 percent last week.

ANGRY TRUCK DRIVERS

Elsewhere in Asia, thousands of Thai truck drivers staged a half-day strike and transport groups said they were ready to block roads into the capital, Bangkok, next week.

"If the government doesn't meet our demands by June 17, we will mobilise our trucks in Bangkok," Thongyu Khongkan, secretary-general of the Land Transport Federation of Thailand, which has 400,000 trucks under its banner, said.



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