Malaysia Raises Fuel Prices as Najib Seeks to Trim Budget Gap Malaysia raised fuel prices for the first time since 2010, joining neighboring Indonesia in curbing subsidies that have stretched government budgets and threatened investor confidence. The price of the widely used RON 95 grade of gasoline will rise 20 sen to 2.10 ringgit ($0.64) a liter at midnight, according to an announcement by Prime Minister Najib Razak today in Putrajaya, outside of Kuala Lumpur. Diesel will increase 20 sen to 2 ringgit a liter. The increases will help the government save about 1.1 billion ringgit this year and 3.3 billion ringgit annually in future by reducing state subsidies, he said. “The external environment is increasingly challenging,” Najib said. “The moderation in the current account of the balance of payments, coupled with continued fiscal deficits, pose medium-term risks to the economy.” Strengthening the fiscal deficit position is vital to sustaining the economy’s resilience and enhancing public and investor confidence, he said. The ringgit climbed to a two-week high today before the measures were announced. Malaysian officials signaled last week they were preparing measures to strengthen the budget position as the currency touched a three-year low. The Southeast Asian nation joins emerging markets from Indonesia to India in working to regain investor confidence as the prospect that the U.S. will reduce stimulus spurs capital outflows. Najib pledged measures to tackle risks to the fiscal position after Fitch Ratings in July cut Malaysia’s rating outlook to negative, citing the nation’s rising debt and lack of budgetary reform. Moody’s Investors Service said last month the country has a “narrow” revenue base and “relatively high” government deficits, state subsidy bills and debt. bloomberg/news/2013-09-02/malaysia-raises-fuel-prices-as-najib-seeks-to-trim-budget-gap.html
Posted on: Mon, 02 Sep 2013 13:48:51 +0000
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