Subsidies on fuel are a key contributor to Malaysia's budget deficit
Malaysia has cut fuel subsidies for the first time in more than two years as it tries to cut its budget deficit.
The subsidy on petrol has been cut by 20 sen (6 cents; 4 pence) a litre and on diesel by 20 to 80 sen a litre.
Prime Minister Najib Razak said the cuts would result in savings of about 3.3bn ringgit ($1bn; £650m) a year.
The government spent 24bn ringgit on fuel subsidies last year, which contributed to a widening budget deficit.
Malaysia's budget deficit, which is the amount the government spent above the amount it raised, was 4.5% of its gross domestic product (GDP) last year.
Ratings agency Fitch cited the high budget deficit as one of the factors that led it to lower the outlook on Malaysia's credit rating to negative from stable in late August.
"It's a process of fiscal consolidation," Mr Najib said. "The market will feel more confident if we can bring down our fiscal deficit.''
Source: BBC News - Business http://www.bbc.co.uk/news/business-23926411#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
