Malaysia cuts fuel price by 3.9 percent

Malaysia Wednesday announced another 3.9 percent cut in petrol prices, following recent declines in world oil prices.

Prime Minister Abdullah Ahmad Badawi said the price of petrol will be cut by 10 sen to 2.45 ringgit (0.72 dollars) while diesel prices will be cut by the same amount to 2.40 ringgit effective Thursday.

It is the second time the government has cut fuel prices since a 41 percent hike in June on the back of soaring crude costs -- a 5.6 percent cut was introduced last month.

The massive rise in June sparked angry street protests and calls for Abdullah to quit. The PM later said prices will be reviewed periodically based on the cost of oil.

Wednesday's cut comes ahead of next week's Eid al-Fitr celebrations in the mainly Muslim country.

"In the last month global oil prices have been fluctuating but on an average it is lower than the previous price average (in August)," Abdullah said in a statement.

"The government is aware that many will be travelling back to their home towns for the festive season from this weekend,"

"(We) hope that this price reduction will alleviate the people's burden, especially while celebrating Eid al-Fitr," he said.

June's hike saw inflation skyrocket, with the August price index reaching a 26-year high of 8.5 percent, driven by the escalating cost of food and fuel.

Opposition leader Anwar Ibrahim, who is mounting an aggressive challenge against Abdullah's leadership, has promised to cut fuel prices substantially if he wrests power from the ruling coalition.


Agence France-Presse - 9/24/2008 10:17 AM GMT