Malaysia, a net oil exporter, plans to cut down on petroleum subsidies gradually to help other sectors of the economy, Deputy Prime Minister Najib Razak said on Monday.
"There's a huge element of petroleum subsidies that the government has set aside...to the tune of nine billion ringgit ($2.4 billion) a year," Najib told reporters at the opening of an Asian oil and gas conference.
He said such resources could be channelled to other sectors of the economy if the subsidies are reduced. "The government has to reduce subsidies gradually in the long run," he said.
Najib said the government has to strike a balance between lowering subsidies and reining in inflationary pressures and consumer reservations due to higher petroleum prices.
"A delicate balance is required," he said.
Malaysia last raised pump prices of petroleum on May 1 to help offset higher crude prices.
A litre of unleaded petrol is currently retailed at 1.37 ringgit (36 US cents) in peninsular Malaysia, still one of the lowest in Southeast Asia.
Officials have said there will be too much a burden on the state unless some of the higher petroleum costs are passed on to consumers.