Prime Minister Abdullah Ahmad Badawi said today that raising the prices of goods and services each time there was a fuel hike would not solve the problem as this would affect Malaysia's competitiveness.

In a Bernama report, the premier said the situation would become worse if others could sell similar goods and services at a cheaper price.

He said companies could maintain their competitive edge if they were able to produce better goods and services and sell them at competitive prices.

"This could be successfully achieved if manufacturing costs could be reduced. This requires effort," he told a press conference in Sitiawan, Perak.

Abdullah was asked to comment on the action by the Lorry Owners' and School Bus Operators' Association which wanted to raise their rates following the increase in diesel price recently.

Yesterday, the Pan-Malaysian Lorry Owners' Association announced its decision to raise their rate from 18 sen per 1.6km to 25 sen while the School Bus Operators' Association also wanted to raise theirs.

'Improve your products'

Abdullah repeated the government's request to producers of goods and services today that they should absorb the additional cost of production due to the increase in the fuel price.

"Every time the diesel price goes up, certain quarters would take the opportunity to raise the prices of goods. This is not the best way,"he said.

He said manufacturers and transport companies should know how to improve their products and services instead of resorting to price increases although there was an additional cost incurred due to the increase in oil or diesel price.

"If there must be an increase, it should be only a little. Don't think of profit only because there are other transport companies which can provide cheaper service," he said.

Abdullah also said that manufacturers could think of a different approach to reduce operational costs. For instance, they could buy raw materials in bulk or share with other manufacturers.

He also asked small producers to think of ways to raise their product value and sell them to a wider market, including overseas.