KUALA LUMPUR: The price of premium grade petrol RON 97 will be floated according to international oil prices from July.
It is understood that oil companies briefed their retailers this week that there will also be changes to grades of fuel sold at pumps.
Several retailers said the "regular" grade RON 92 fuel would be phased out and a new grade, RON 95, would be introduced, in addition to RON 97.
The retailers said there would be a subsidy on the price of RON 95 fuel used by a majority of cars in Malaysia.
Diesel would be upgraded to European standards, most probably the Euro 2, allowing the introduction of more vehicle models with advanced diesel engines in Malaysia, they added.
While it remains below the Euro 4M class of diesel fuel, the Euro 2 diesel has significantly lower sulphur content.
National oil company Petronas is expected to lead the way in selling biodiesel fuel. The other oil companies are expected to follow later.
Malaysia spent some RM40.5 billion on fuel subsidies from 2005 to last year.
The government has been working on a formula to reduce the amount of government subsidy on petrol while keeping negative impact from the swaying international crude oil prices to the minimum.
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