06 June, 2008

Up , up and 'away' !!

The Malaysian government will not back down on its decision to increase the price of fuel despite growing opposition and protests.

Analysts have warned that Prime Minister Badawi could face renewed calls to quit as the price hike will particularly affect the low-income groups which traditionally form his core support base.

Malaysians will also have to pay higher electricity tariffs - up to 26% more for some consumers - starting next month.

The energy prices are expected to slow Malaysia's economic growth and consumer spending and push inflation to a 10-year high of about 5%, up from the current 3%.

PROTES, an anti-inflation coalition of opposition parties and non-governmental groups, has called for rallies nationwide that will peak in a mass demonstration in Kuala Lumpur on July 12 to force the government to back down from the plan.

The 78 sen hike or 40 per cent increase for the ULG 97 petrol is still below the antiticpated RM4 per litre price projected earlier and said to be among the cheapest in Asia.

Now the 56 billion ringgit question....





Anyway, world's costliest petrol is Turkey, the prices of petrol are the highest in the world. Petrol costs a whopping US$2.68

The cheapest could be Venezuela (Caracas), petrol is priced at US$0.05

Talking about petrol prices, Abdullah said the government was extremely mindful of the burden on the people as a result of the price increases on fuel and electricity tariffs.

He said raising fuel prices and electricity tariffs was not something that the government liked to do but it had to bite the bullet now to prepare for the long-term benefit of the nation and future generations.

Analysts said this week's price rises could trigger an early exit for Abdullah.

"The fuel price hike makes it more difficult for the prime minister to conduct a smooth transition of power," said Hussin Mutalib, a political scientist who tracks Southeast Asian issues at the National University of Singapore.

"There could be a push forward for him to leave fast."

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