PUTRAJAYA, MALAYSIA - The government will reduce fuel prices by a further 15 sen ($0.062) by end of the year if world crude oil prices stay at US$109 ($154.07) per barrel.

'I will be happy to reduce it by 15 sen by the end of the year,' Prime Minister Datuk Seri Abdullah Ahmad Badawi said, if world prices were held down.

Abdullah said the next monthly review of fuel prices would take place either on Oct 1 or the middle of the month.

'It is very likely that the review will be on Oct 1. We promised to review the prices every month and that is what we will do.'

He said that as prime minister, he had to "offer only the best deal for the rakyat" even as world prices continued to fluctuate.

Abdullah said this in his capacity as finance minister after chairing the National Financial Council meeting at the Finance Ministry yesterday.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said on Wednesday that the government might reduce fuel prices before Hari Raya.

Shahrir said world prices were at present stable and that he hoped it would go down further.

On Aug 22, the pump price of petrol was reduced to RM2.55 from RM2.70 per litre (RON 97) and diesel to RM2.50 from RM2.58 per litre.

The new prices took effect a week before the scheduled implementation of a new price mechanism.

The government had announced on Aug 1 that pump prices would be adjusted according to world crude oil prices on the first day of each month, starting Sept 1.

A minimum subsidy of 30 sen a litre and a ceiling price of RM2.70 a litre for petrol had been fixed until at least the end of the year.

The lower petrol price was decided by the cabinet after taking into consideration the drop in world crude oil prices and rising inflation.

Malaysia's inflation rate rose to a 26-year high of 8.5 per cent in July due mostly to rising costs of fuel and electricity.

The government had cut crippling fuel subsidies on June 5, resulting in the petrol price rising from RM1.92 to RM2.70 per litre. -- NST