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Malaysia PM in Key State to Douse Fuel Hike Anger

Malaysia's Prime Minister Abdullah Ahmad Badawi headed to the politically crucial state of Sarawak on Tuesday to regain support from political leaders unhappy over a steep rise in fuel prices.

Visiting Kazakhstan President Nursultan Nazarbayev, right, and Malaysian Prime Minister Abdullah Ahmad Badawi pose outside the latter's office in Putrajaya, outside Kuala Lumpur, Malaysia, Monday, June 26, 2006. Nazarbayev arrived in Malaysia Sunday for a three-day visit. (AP Photo/Bazuki Muhammad, Pool)
Bazuki Muhammad
Visiting Kazakhstan President Nursultan Nazarbayev, right, and Malaysian Prime Minister Abdullah Ahmad Badawi pose outside the latter's office in Putrajaya, outside Kuala Lumpur, Malaysia, Monday, June 26, 2006. Nazarbayev arrived in Malaysia Sunday for a three-day visit. (AP Photo/Bazuki Muhammad, Pool)

The prime minister pledged 1.0 billion ringgit ($306.6 million) in extra development spending for the state, a ruling party lawmaker said after talks with the premier.

"He pledged 1 billion ringgit for various development projects," Alex Linggi, an MP, told Reuters by telephone from the state on Borneo island.

Prime Minister Abdullah Ahmad Badawi is visiting Sarawak to shore up support among political leaders, a day after he announced a cut in ministers' allowances and holidays abroad to
assuage public anger over the fuel hike.

The beleaguered prime minister, who has been trying to fend off a challenge to his leadership since his Barisan Nasional coalition suffered its worst electoral performance in March, has also offered to widen a social safety net for the poor to cushion the impact.

"These measures will not be the last. Many other announcements will be made by the government," he told reporters on Monday night, trying to fend off pressure from his own party as well as the opposition, which has threatened to bring 100,000 people to the city centre next month.

Spiraling crude oil prices have driven up the cost of fuel subsidies to near crippling levels in several countries.

Malaysia followed India, Indonesia, Taiwan and Sri Lanka when it raised pump prices last week and provoked a public outcry and protests by opposition groups.

On Monday, Nepal's government said it had sanctioned a rise in fuel prices, and truckers in South Korea have vowed to stop work over the high cost of diesel.

Pump prices for petrol in Malaysia are still among the lowest in Asia. But consumers have been questioning why they have to face a steep rise in prices despite the fact that Malaysia, Asia's largest net oil exporter, earns 250 million ringgit ($76.8 million) a year in revenue for every $1 rise in crude prices.

Leaders of Sarawak, which together with neighbouring Sabah accounts for a third of the lawmakers in parliament, said they will be discussing with Abdullah ways to lessen the impact of prices on the poor and for a fair distribution of government funds.

"I'm not going to fight, I just want fairness," state agency Bernama quoted Sarawak chief minister Tan Sri Abdul Taib Mahmud as saying ahead of Abdullah's trip.

Sarawak and Sabah are the bastion states for Abdullah's ruling coalition, holding firm even in the March election, but analysts say the opposition will be targeting discontented lawmakers in its bid to further weaken the government.

Former deputy prime minister Anwar Ibrahim, who has previously said he had enough lawmakers to topple Abdullah's coalition, has seized on the fuel hike, addressing one of the biggest meetings yet in the capital last weekend to drum up support.

On Tuesday, members of the opposition Islamic party, PAS, plan to submit a protest note to the prime minister's office against the fuel hike ahead of a march to the headquarters of state energy firm Petronas after Friday prayers.