Mr Abdullah said the government would spend RM45 billion (S$19 billion) on fuel subsidies this year, state news agency Bernama reported late on Saturday.

This will exceed its annual RM40 billion budget for major development and infrastructure projects under the country's ninth development plan.

'It is RM5 billion more, we need to look for more money,' Mr Abdullah told the agency.

'As the government, we will try our best to ease this burden. We will not allow this problem to grow. We cannot wait and see any more. We have the political will to act to ease the burden on the people,' he added.

Mr Abdullah said with global oil prices hitting US$124 (S$169) a barrel, the impact on Malaysians would be huge, Bernama reported.

He said the government was also uncertain whether the funds set aside to moderate the present soaring prices of food was enough.

'We have allocated RM4 billion to provide for sufficient supply of food. We will spend RM2.4 billion, and will be left with RM1.6 billion. We do not know if this sum would be enough for the long term,' he told Bernama.

'As such, we have decided to review all projects and the allocations for them. We have to tackle both these crises because they affect the people directly,' he said.

Malaysia, which imports about 30 per cent of its rice needs, heavily subsidises more than 20 daily food items including milk and salt.

World rice prices have soared this year, a trend blamed on higher energy and fertiliser costs, greater global demand, droughts, the loss of rice farmland to biofuel plantations, as well as commodities speculators. -- AFP