Malaysia cuts ministers' allowances, delays projects

Pump prices for petrol in Malaysia are still among the cheapest in Asia.

Malaysia cuts ministers' allowances, delays projects
Malaysian Prime Minister Abdullah Ahmad Badawi, trying to assuage public anger over a steep hike in fuel prices, said on Monday government ministers will take a 10 percent cut in allowances.

Abdullah also said that ministers' overseas holidays will be reduced and mega projects delayed to save costs. Together the measures will result in a saving of 2 billion ringgit, ($613 million), he told reporters after a meeting to review the impact of high energy prices.

"The government also feels the people's pain and the top leadership should lead by example in facing this challenge. As such, the entertainment allowance for the prime minister, deputy prime minister and ministers and deputy ministers will be reduced by 10 percent," he said.

Spiralling crude oil prices, which were trading at $136.80 a barrel on Monday, have driven up the cost of fuel subsidies for many governments to near crippling levels.

Malaysia followed India, Indonesia, Taiwan and Sri Lanka last week, raising pump prices and provoking a public outcry and protests by opposition groups.

Abdullah, already fighting a challenge to his leadership following a poor showing in a general election in March, earlier said the fuel hike decision was a difficult one to make, but there had not been a choice.

Petrol prices were increased by 41 percent and diesel 63 percent in line with a global surge in oil prices, a measure that would drive inflation to a 10-year high of 4.2 percent in 2008.

"In all honesty, it was a difficult and agonising decision to make. Many times, we have been tempted to walk away from such a difficult decision," Abdullah told an energy conference.

Pump prices for petrol in Malaysia are still among the cheapest in Asia.

Reuters

Güncelleme Tarihi: 09 Haziran 2008, 18:19
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