The government has just announced that petrol price will go up by 78 sen at midnight - a 40.6 percent jump from RM1.92 per litre to RM2.70.
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The price of diesel will go up 92 sen, or 58.2 percent - from RM1.58 per litre to RM2.50.

The price hikes are among government measures to cut the spiralling bill for oil subsidies, which is expected to amount to RM56 billion this year.

At a press conference held at 5pm, Prime Minister Abdullah Ahmad Badawi also announced that the government plans to offer rebates to motorists to offset the fuel price increase.

Under the scheme, vehicles below 2000cc will receive a RM625 rebate annually - to compensate for 800 litres of fuel used under the new price.

Motorcyclists will be given a rebate of RM120. The money will be paid by postal order.

Rebate will be paid when motorists renew the road-tax for their vehicles.

The government is expected to save RM4 billion under this new subsidy restructure.

If petrol is to be sold at full market prices, it could be as high as almost RM4 a litre - about 100 percent above current levels.

However the government is slowly expected to head towards totally abolishing the fuel subsidy.