Explain fuel price hike to public, Umno told

The Associated Press
06 March 2006

Explain fuel price hike to public, Umno told

Malaysian PM says reasons for increase not made clear; many think subsidies have ended

MALAYSIAN Prime Minister Abdullah Badawi, facing criticism over a sharp fuel price hike, has ordered members of the ruling party Umno to explain the move.

Datuk Seri Abdullah said yesterday that many people did not understand the reasons for the hike, with some thinking that the government had ceased providing fuel subsidies.

'The opposition has taken advantage of the situation to criticise the government,' the Premier was quoted as saying by the national news agency, Bernama.

Last week, the government raised the retail prices of petrol, diesel and liquefied petroleum gas by as much as 23 per cent, but pledged not to raise them any further this year. Despite the increases, fuel prices in Malaysia - a net oil exporter - are still among the lowest in South-east Asia because of government subsidies.

Opposition parties and private policy groups have said the increases will widen the gap between rich and poor.

They also questioned why the government did not use profits from the national oil company Petronas, which benefited from higher global oil prices, to subsidise fuel for the poor.

Datuk Seri Abdullah said fuel prices were raised because of higher global oil prices, and also to encourage people to consume less fuel, Bernama reported.

'If the fuel is cheap, the people will not be thrifty in using fuel,' he was quoted as saying. 'We fear the oil reserves will be depleted one day and we will become an oil-importing country.'

Meanwhile, the Star newspaper reported that parents with children studying in Singapore are beginning to feel the pinch. Thirteen-year-old Lim Wei Jie, who studies in Singapore, used to be driven there by his parents. However, for the first time yesterday, he was boarding a bus back to the republic after spending the weekend with his family.

His mother, Madam Theresa How, 39, said: 'We used to take him to Singapore and back, but the fuel price increase and our tight schedule have forced us to stop doing so.'

Wie Jie said he was a bit nervous about travelling alone, but his mother felt it was the right thing to do as the bus fare was only RM30 (S$13) per trip while travelling by car would cost them RM200 for a return trip.

The mother and son were among those interviewed by The Star at the Puduraya bus terminal to find out if commuters now preferred to take public transport for long haul trips following the recent price hikes.

The random survey, however, did not show any drastic increase in bus passengers to indicate that many motorists were discarding their cars for buses for the long journeys.

Transnasional Express Sdn Bhd operation assistant Fuad Ahmad Md Yusoff said ticket sales for outstation routes over the weekend had not shown any marked increase.

However, food stall owner Rashidah Mohamed Zain said the number of people visiting his stall indicated there were more people travelling by bus, adding that the number of customers had increased by 60 per cent yesterday. -- ASSOCIATED PRESS