KUALA LUMPUR, December 4, 2010 (AFP) – Malaysia has cut subsidies for fuel and sugar, a report said Saturday, in a bid to reduce its budget deficit by saving the government 1.18 billion ringgit (376 million dollars). The opposition scored unprecedented gains in elections in 2008 which saw it claim five states and a third of parliamentary seats. The next election is not officially due until 2013 but pundits say it could be held early next year.
The cuts will have an immediate affect, with fuel prices by five sen (1.6 cents) to 1.90 ringgit a litre for gasoline and 1.80 ringgit for diesel. Liquefied petroleum gas will rise five sen to 1.90 ringgit a kilogram.
Sugar price will be hiked by 20 sen to 2.10 ringgit a kilogramme, in a move also seen as promoting healthier lifestyles.
It is the second time in five months that the prices for these two key commodities were raised, and the increases come into effect as oil prices rose to their highest level in more than two years.
New York’s main contract, light sweet crude for January, gained 1.19 dollars to close at 89.19 dollars a barrel, its highest point since October 9, 2008.
Idris Jala, minister in the prime minister’s department, described t