Malaysia's government on Friday said it will cut retail gasoline prices 5.6 percent to help curb inflation, which soared to 8.5 percent in July, the highest level in decades. The pump price of gasoline will come down to 2.55 ringgit a liter ($2.92 a gallon) from 2.70 ringgit ($3.12 a gallon) from Saturday, Prime Minister Abdullah Ahmad Badawi announced. Diesel price will be reduced to 2.50 ringgit a liter ($2.89 a gallon) from 2.58 ringgit ($2.96 a gallon). The announcement came as a surprise since Abdullah had said earlier that pump prices will be reduced only at the end of the month, and only if global crude oil prices continue to fall. “The government hopes that the reduction in gasoline and diesel prices will help to ease consumers' burden as well as ease inflationary pressure,” Abdullah said. This is the first price cut since the government hiked gasoline prices a stunning 41 percent and diesel by 63 percent in early June to curb a runaway subsidy bill. The price cut is aimed partly at curbing public frustrations over soaring inflation and will relieve pressure on the central bank.
