Malaysians stage rare anti-govt protest over fuel

KUALA LUMPUR, March 3 (Reuters) Nearly 1,000 Malaysians protested in the capital today against fuel price rises, the first significant anti-government demonstration in years.

Protesters, led by the main opposition Islamic party, chanted anti-government slogans and called on Prime Minister Abdullah Ahmad Badawi to step down over his government's decision this week to raise pump prices by another 20 per cent.

''Prices rise, Badawi should step down,'' said one banner.

''We ordinary people are suffering. This is a betrayal by the government,'' Parti Islam se-Malaysia (PAS) Deputy Chief Nasharudin Mat Isa told the rally outside the Petronas Twin Towers, headquarters of State oil company Petronas.

Dozens of riot police, backed by water cannons, kept a tight security cordon around the 88-storey towers.

There was no violence, but Kuala Lumpur had not seen a large anti-government demonstration under Abdullah's rule. He took power in 2003 and has sought to heal the wounds of the late 1990s when financial and political crises provoked major street protests.

The government this week raised pump prices of petrol and diesel by about a fifth, as part of a long-term plan to cut 1.2 billion dollars in fuel subsidies that are burning a hole in its budget.

Since October 2004, the regulated pump price of petrol has jumped 40 per cent and diesel has doubled.

Today's protesters also took aim at Petronas, Malaysia's largest and most profitable company, saying it was making money from high oil prices while the poor paid more for fuel.

Malaysia is not alone in the region in being forced to cut fuel subsidies and risk a public backlash. In neighbouring Indonesia, a similar move led to angry protests last year.

REUTERS SHB BS1520