Malaysians on Tuesday faced higher fuel prices as part of the Government’s efforts to reduce the country’s fiscal deficit by cutting subsidies.
Petrol and diesel prices each rose by 20 sen (6 cents) to save the government about 3.3 billion ringgit (1 billion dollars), according to Prime Minister Najib Razak, who is also the country’s finance minister.
“The reduction of 20 sen in fuel subsidy means that the government will still subsidise 63 sen per litre of petrol and 80 sen per litre of diesel,” he said in a press briefing a few hours before the fuel price increases were implemented.
The last time Malaysia raised fuel prices was in December 2010.
Tan Kok Wai, Deputy Chairman of the opposition Democratic Action Party, said the price hike would affect those least able to pay.
Malaysia’s budget deficit was 4.5 per cent of gross domestic product last year.
The country’s economic growth slowed to 4.3 per cent in the second quarter of 2013 compared to 5.4 per cent for the same period last year.