UPDATE 1-Malaysia cuts gas prices for heavy industrial users

(Adds details, quotes, economist comments)

PUTRAJAYA, Malaysia, July 11 (Reuters) - Malaysia has cut natural gas prices for heavy industrial users by 26.7 percent after considering feedback from various parties, Economic planning minister Amirsham A. Aziz said on Friday.

"The uncertain global economic conditions and surging prices of raw materials have made it difficult for the private sector to plan their costs," he told reporters.

The natural gas price will fall to 23.88 ringgit ($7.35) per million btu (British thermal unit) from 32.56 ringgit previously.

The new price, effective July 1, marks a 70 percent discount to the market rate, now at 79.00 ringgit per mmbtu, he said.

Heavy industrial users are those who use more than 2 million square cubic feet of gas per day. The other category is manufacturers who use less than 2 million cfd.

Economists said the move would have little impact on rising inflation, which the central bank has said could top 6 percent in June, the highest in 26 years.

"It would see some easing of the effects of inflation but overall inflation is on the upside," said Joanna Tan, economist with Forecast Pte Ltd.

"Right now, external fuel prices and food prices have pushed up inflation. Malaysia appears to be using fiscal schemes to temper inflation effects." "With the reduction, costs of making exports is lowered. It might make exports a little more competitive but then again slower external demand has been weighing on exports," she said.

Last month, the government raised fuel prices to rein in its ballooning subsidy bill.

That would drive up inflation for the rest of the year before price pressures moderate in the second half of 2009, central bank chief Zeti Akhtar Aziz said earlier in the week. ($1=3.249 Malaysian Ringgit) (Reporting by Soo Ai Peng; Writing by Niluksi Koswanage; Editing by Jacqueline Wong)