Malaysia will remove price controls on gasoline and diesel, allowing pumps to sell fuel at world market prices in an attempt to reduce the government's ballooning subsidy bill, a Cabinet minister said Tuesday.The new price structure will start in August, and retail cost of the fuel "will depend on global market prices," Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad said. Gasoline, diesel and gas are heavily subsidized at present. The subsidy is expected to cost the treasury the equivalent of about $14 billion this year, which the government says the increasing subsidy bill is becoming untenable.

It says Malaysians who can afford to pay global prices should do so.

Lower-income group of people, however, will be given subsidy in other forms — cash handouts and fuel quotas, Shahrir was quoted as saying by the national news agency Bernama.

Details of the new system will be released Wednesday, he said.

Fuel prices in Malaysia are among the lowest in Asia. Regular gasoline in Malaysia costs the equivalent of $2.34 a gallon — less than half the price in neighboring Singapore.

On Monday, Malaysia started enforcing a ban on gasoline sales to foreign-registered vehicles near the Thai border. Thailand sells regular gasoline at $3.87 a gallon.

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