WRAPUP 1-India, Malalysia raise fuel prices as oil rally bites
June 4th, 2008 | by admin |By Himangshu Watts
NEW DELHI, June 4 (Reuters) - India and Malaysia raisedretail fuel prices on Wednesday, joining a growing number ofAsian nations no longer able to afford big subsidies in the faceof record-breaking oil prices.
The propect of higher fuel prices for Asian drivers, whosedemand has helped power the oil price rally, pushed U.S. crudeCLc1 prices to their lowest level in three weeks.
But analysts cautioned that oil demand will not besignificantly dented until China also raises prices.
Oil’s four-fold price rise since 2003 has hit consumersaround the world, and forecasts that prices are unlikely to fallunder $100 a barrel has forced governments to act, despite fearsof galloping inflation.
The rally has forced Taiwan, Sri Lanka, Bangladesh andIndonesia to review subsidies.
“Due to a relentless increase in international oil prices,it has now become absolutely necessary for the consumer, who isan important stakeholder, to also shoulder a small part ofincreased burden,” India’s oil minister, Murli Deora said.
The action has not come at a good time for eithergovernment.
India’s ruling party faces several state polls this year anda general election by next May, while Malaysia’s Prime MinisterAbdullah Ahmad Badawi is trying to arrest a slide in publicsupport and fend of a challenge to his leadership.
