Oil subsidy reduction can prevent leakage - Dr Mahathir

He said if the subsidies were not reduced, the fuel supply would continue to be manipulated by certain quarters to reap profits, especially through cross-border smuggling of the fuel to neighbouring countries.

"Oil is cheap here (Malaysia). Even in oil-producing countries like the Arab countries, the price is higher than here. How could we sell oil cheaply? That's why there are people stealing our oil. Everyday, they steal."

Dr Mahathir said this to reporters after delivering a keynote address titled, 'The Importance of the English Language in the 21st Century, the Digital Era', at Wadi Sofea College, here, today.

Also present were Universiti Malaysia Kelantan vice-chancellor Prof Datuk Dr Raduan Che Rose and Wadi Sofea College head Datuk Hassan Harun.

The Domestic Trade, Cooperatives and Consumerism Ministry announced yesterday that the subsidy for petrol RON95 and diesel was reduced by 20 sen per litre, effective 12.01 this morning.

Hence, the new price for petrol RON95 is RM2.30 per litre and RM2.20 for diesel.

Dr Mahathir said the oil subsidy reduction should not be seen as the main factor for the rising cost of living.

"Costs will increase all the time. We cannot ask for pay rise and costs be reduced at the same time. Even the minimum wage has gone up. The production costs of goods go up when people's salaries are increased," he said.

On the political situation in Selangor, Dr Mahathir said Selangor Umno must rise again and do something worthwhile when Pakatan Rakyat was in crisis now.

He said, cynically, "I'm sad to see Umno not gaining anything during Pakatan's political disarray.