Malaysia stops selling gasoline to Thais

By JULIA ZAPPEI – 2 June 2008 3 p.m .

KUALA LUMPUR, Malaysia (AP) — Malaysia began enforcing a ban on gasoline sales to foreign-registered vehicles near the Thai border Monday, causing some stations' business to trickle nearly to a halt.

The ban is aimed at curbing the costs of Malaysia's fuel subsidies, which keep retail fuel prices at nearly half those of neighboring Thailand despite soaring global petroleum prices.

Thousands of Thais and Singaporeans drive into Malaysia every day to fill their tanks and take advantage of the subsidized prices, which were expected to cost Malaysia's government $14 billion this year.

Government authorities say the ban is a temporary measure until they revise the subsidy system so that it more directly helps its intended beneficiaries: low-income Malaysians.

Abdul Wahid Bidin, acting president of the Petroleum Dealers Association of Malaysia, said 90 percent of the usual customers of some fuel stations near the border were from Thailand.

"There are complaints from the dealers that they've got no business, no customers at all," Abdul Wahid said, expressing hope the ban will be lifted soon.

Deputy Prime Minister Najib Razak said Sunday that the ban would be postponed for 300 stations within 30 miles (50 kilometers) of Malaysia's borders with Thailand and Singapore, but local media clarified Monday that the delay was only for the southern state of Johor near Singapore.

Regular gasoline in Malaysia costs $2.34 a gallon. Thailand sells regular gasoline at $3.87 per gallon.

Alang Zari Ishak, president of oil company Esso Malaysia's dealers association, said the ban affected about 100 gasoline stations in the north near Thailand.

"The implications will be quite severe," he said, adding that a system in which foreigners pay higher prices — instead of being completely barred from buying fuel — would be better.