The increase to 0.15 ringgit (US$0.04; euro0.03) per cigarette, announced by the Finance Ministry late Monday through the national news agency Bernama, was unexpected, because it occurred before the government’s 2008 budget announcement in September.

A ministry official, speaking on condition of anonymity because he is not authorized to make public comments, confirmed the decision Tuesday.

The move was in line with government efforts to encourage healthy lifestyles and curb smoking among youths, the ministry said.

About 10,000 people in Malaysia die each year from smoking-related ailments, according to government statistics.

Government counts have varied between 4 million and 6 million smokers among the country’s 26 million people.

Shares of cigarette-makers were little changed midday Tuesday. Cigarette producers are likely to preserve their profit margins by raising prices to at least match the duty hike, analysts said.

Chin Tuck Weng, corporate affairs manager at British American Tobacco (Malaysia) Bhd., said the company hasn’t determined how the tax change will affect its prices or the company overall. BAT dominates Malaysia’s cigarette market. Its Dunhill brand accounts for about four in every 10 cigarettes sold.

The Malay-language Berita Harian newspaper estimated earlier Tuesday that prices for premium cigarettes would rise to 8 ringgit (US$2.33; euro1.71) from 7.40 ringgit (US$2.15; euro1.58) for a 20-cigarette pack.

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