KUALA LUMPUR, Feb 21, 2008 (AFP) - Malaysia's Islamic opposition said Thursday it would use the country's oil profits to pay for healthcare and retain controversial fuel subsidies if it ruled the nation.

In a policy platform unveiled ahead of March 8 general elections, the Pan Malaysian Islamic Party (PAS) said it hoped voters would back its proposals and deliver a win in three conservative northern states.

"We are pushing for a peaceful, just and clean government in power," said PAS president Abdul Hadi Awang.

"We want to use our oil profits to pay for our health needs and ensure that people can continue to have low costs with low fuel prices," he said.

"It is our hope that voters will see that PAS provides an option for a moderate government with Islamic values, one that is free of corruption and that has the people's interest at heart."

Since winning independence half a century ago, Malaysia has been ruled by a coalition of race-based parties under the Barisan Nasional (BN) banner, led by Prime Minister Abdullah Ahmad Badawi's United Malays National Organisation.

Abdul Hadi said he hoped opposition parties would deny the BN a two-thirds majority in parliament in order to "bring a change to politics in the nation."

He said some of the key policies included making state-owned oil company Petronas the responsibility of parliament to ensure transparency and reduce the price of petrol and diesel.

Abdullah said recently that the government would have to remove oil and fuel subsidies, which have kept pump prices among the lowest in the region despite a rise in global prices.

The last fuel price hike in 2006 saw thousands take to the streets, clashing with police who tried to disperse them with water cannon and teargas.

PAS said it would use the profits of Petronas to fund a national health fund with subsidised healthcare.

Abdul Hadi said his party was fielding 65 candidates for federal parliamentary seats, and was also targeting parliaments in the northern states of Kedah, Terengganu and Kelantan.

At its strongest, PAS, a conservative party of Muslim scholars, controlled Kelantan and neighbouring Terengganu state which it won in 1999 elections.

But its tough line, including a campaign to turn Malaysia into a religious state, and prohibitions on nightclubs, skimpy clothes and alcohol, coupled with excitement over Abdullah's new administration saw it lose Terengganu in 2004.

It now holds a wafer thin majority in Kelantan, a state considered a key battleground in the polls.

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