The inflation rate edged up to 3.0 percent in April from 2.8 percent the month before, driven by higher food prices, according to official data released yesterday.

Malaysia heavily subsidises a range of basic items including fuel, rice, flour and bread, moderating the effect of rising prices compared to other Asian nations.

However, the growing subsidy bill is putting a strain on government coffers, with fuel subsidies alone expected to hit over RM53 billion ringgit this year.

Recently, the government said it would spend RM4 billion to increase food production and tackle price hikes as the country faces spiralling global oil and food costs.

Prime Minister Abdullah Ahmad Badawi has also said that several projects under the government's multi-billion-ringgit five-year development blueprint are currently under review due to rising costs.

The Department of Statistics said the consumer price index was up 0.3 percent in April from the previous month. For the first four months of the year, inflation averaged 2.7 percent.

Meanwhile, the price of oil has surged more than US$4 and hit US$135 a barrel for the first time on the futures market yesterday.