UPDATE 1-Malaysia approves toll hike for expressways

(Adds PLUS statement)

KUALA LUMPUR, Feb 26 (Reuters) - Malaysia has approved a price hike for highways including the North-South Expressway (NSE) from March 1, state-controlled toll road operator PLUS Expressways (PLUE.KL) said on Thuesday.

PLUS Expressways operates the North-South expressway, the country's longest highway that runs through the entire length of the Malaysian peninsula.

In a statement, PLUS said the toll rate increase will be half of the scheduled rate of increase under its contract with the government, where the toll operator was allowed to raise rates by 10 percent every three years.

PLUS also said the government has agreed to compensate it based on the actual traffic volume.

The toll operator last hiked rates in 2005 but a scheduled price increase last year was delayed as inflation in the Southeast Asian country reached its highest level in more than two decades due to surging crude oil prices.

Shares of PLUS closed up 2.1 percent, outperforming the broader market .KLSE. (Reporting by Soo Ai Peng and Varsha Tickoo; Editing by David Chance and Niluksi Koswanage)