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KUALA LUMPUR - MALAYSIA will keep fuel prices unchanged for as long as it can afford, the prime minister was quoted on Thursday as saying, as speculation is rife that he plans to call a snap election this year.
Elections are not due until 2009 but the government is expected to bring them forward to capitalise on a raft of state construction projects launched in the past 18 months. 'When we feel that it is time to consider a price increase, then we will,' Abdullah Ahmad Badawi was quoted as saying by The Star newspaper.
'If we can continue to maintain the price, we certainly will. But we are closely monitoring the situation.'
Malaysia has some of Asia's lowest petrol and diesel prices, fixing them well below market rates and paying subsidies to fuel retailers to compensate them. But with crude hovering near the record US$100 (S$145) a barrel mark, the cost of subsidies has ballooned.
Malaysia, a net oil exporter, spends RM15 billion (S$6.5 billion) a year on fuel subsidies, a bill that could rise to RM20 billion this year - a figure the premier has warned will be unsustainable.
The last time it hiked fuel prices in February 2006, the government's popularity plunged and inflation leapt to a seven-year high of 4.8 per cent. -- REUTERS
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