Higher oil prices are creating problems for Asian countries which subsidise fuel costs, threatening economic growth if the subsidies are kept in place and consumer outrage if they are not. Malaysia raised the price of fuel between 7-23% in late 2005 in an attempt to cut the soaring cost of government subsidies, but analysts warned it could face a "double whammy" in the form of a slowdown in growth and a rise in inflation. Subsidies for petroleum cost 4.8BN ringgit last year and would reach 8.9BN this year if prices were not increased to help cope with rising international oil costs, the government said. A diesel shortage crippled Malaysia's transport industry in December after the government introduced a quota system in an attempt to curb smuggling of the heavily subsidised fuel to Thailand. Other issues are raised in this article.
