Kuala Lumpur  - Malaysia will lift price controls on petrol and diesel as part of efforts to reduce the government's financial burden from subsidies, a minister said Tuesday.

The ruling, which takes effect beginning August, will allow pumps to sell fuel at world market prices, said domestic trade and consumer affairs minister Shahrir Abdul Samad.

Petrol, diesel and gas are currently heavily subsidized, making them among the lowest in the region.

The government has said subsidies alone this year is expected to cost 45 billion ringgit (14 billion dollars).

Shahrir was quoted as saying by the official Bernama news agency that petrol and diesel prices would now "depend on global market prices."

He said lower-income groups would still be given subsidies but in other forms such as cash claims and fuel quotas, adding that details of the new system will be released Wednesday.

Regular gasoline in Malaysia is priced at 1.92 ringgit (0.61 US cents) per litre. (dpa)