KUALA LUMPUR (AFP) — Malaysia's government faced street demonstrations and public outrage Thursday over its decision to hike petrol prices 41 percent overnight, in a bid to curb its massive subsidies bill.
Opposition groups held protests in downtown Kuala Lumpur and in the northern city of Ipoh, putting further pressure on Prime Minister Abdullah Ahmad Badawi who is fighting to keep his job after disastrous March elections.
"The effect is going to be a tremendous burden to people, especially the poor," said Democratic Action Party lawmaker Teresa Kok, one of about 100 people at the Kuala Lumpur rally.
Police officers and riot squads armed with batons and shields dispersed the crowd, which waved banners reading "Petrol is hiked but salaries are not".
Organisers said more than 100 people attended the Ipoh rally and that more demonstrations are planned for the coming weeks.
Home Minister Syed Hamid Albar, though, criticised the "illegal" demonstrations and urged the public not to "over-react" to the price hikes.
"It is not a political issue but a national issue that we all need to try and tackle together, regarding the rise of oil and energy prices at the global level," he told reporters.
The new pump price for petrol will be 2.70 ringgit (0.84 dollars) and 2.58 ringgit for diesel. Petrol previously cost 1.92 ringgit, among the cheapest in Asia.
Abdullah's announcement on Wednesday evening triggered chaos across the country as motorists swamped fuel stations to fill up before the measure took effect, bringing traffic to a standstill in Kuala Lumpur.
The premier indicated that further increases were in the pipeline as Malaysia moves to completely abandon fuel price controls that would have cost 17.4 billion dollars this year -- about a third of the national budget.
Motorists who turned up at petrol stations Thursday to pay sharply higher prices to fill their tanks were furious over the decision.
"We can do nothing about this government increase -- we have to buy fuel, otherwise how can we go to work?" said 56-year-old engineer K. Letchumanan.
Aminah Rahmat, a 46-year-old streetside vendor who had set up her food stall outside a petrol station, said she could already barely manage on her monthly income of less than 1,000 ringgit (300 dollars).
"The government does not care for our welfare, that is why they have made such a huge fuel increase," she said.
"How can I afford to pay so much to transport my cooked food to my customers? I will go out of business."
Bus operators said that a third of companies may have to close down and lorry firms said their rates would have to rise, in a move that will trickle down to higher prices for goods and services.
Abdullah is taking a major political risk in removing price controls as he attempts to recover from general elections that dealt the ruling coalition its worst results in half a century.
Rising prices of food and fuel were a major factor in the ballot, which has triggered repeated calls for the premier to stand down.
"It just shows Abdullah is incapable of leading the country," said senior ruling party lawmaker Mukhriz Mahathir, the son of former premier Mahathir Mohamad who has campaigned for the premier to quit.
"He is not taking to heart the miseries that are being felt by the people when that should be something he tries to solve as a leader," Mukhriz told AFP.
The stock market sank 2.4 percent as the central bank said the price hike could suppress economic growth and drive up inflation as high as 5.0 percent this year, from levels of 3.0 percent in April.
The ringgit currency sank, and government bonds plunged on expectations Bank Negara will raise interest rates to curb inflation, despite it stating there was no need yet for an increase.
But there was good news for Thais and Singaporeans who will now be allowed to buy fuel at border petrol stations after a recent ban was lifted in view of the subsidy cut.
seals: the only government that talks about reduce price and cut cost at top level is PKR/DAP/PAS. BN talks about people taking the cost.