Fuel Price Hikes Underscore Policy Dilemma

June 2008 | Political Risk Analysis

Prime Minister Abdullah Ahmad Badwai's tenure continues to look increasingly fragile following the government's unpopular fuel price hike on June 4. While the 41% and 63% price increases for petrol and diesel, respectively, were necessary steps to prevent Malaysia from sliding towards fiscal disaster, the inflationary impact of the policy moves threatens to pile yet more pressure on the ruling Barsian Nasional (National Front) coalition, and further undermine it's beleaguered leader.

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