Malaysia to decide on foreigner fuel sales ban on Tuesday

SINGAPORE, June 1 (Reuters) - Malaysia will decide on Tuesday on a new mechanism for fuel subsidies and when to implement curbs on foreign motorists buying fuel at Malaysian petrol stations, the country's deputy prime minister said on Sunday.

Najib Razak said the government would discuss a subsidy scheme for pump sales in a meeting scheduled on Tuesday, delaying an earlier proposal to ban sales to foreigners at local prices which are subsidised.

"We have to find a new effective date. Because there are other matters like for example can we have we have two separate pump prices," Razak told reporters on the sidelines of a security conference in Singapore.

Malaysia had earlier said filling stations in its towns bordering Singapore and Thailand would from Monday be temporarily barred from selling fuel to foreign-registered vehicles in a move aimed at curbing the abuse of subsidies.

Hundreds of Thai and Singapore motorists cross into Malaysia daily to seek cheaper diesel and petrol.

Razak said the government wants to implement a new fuel subsidy scheme to ensure that only Malaysians receive the subsidies.

"The whole intention is to rationalise the subsidy scheme. And when we rationalise the subsidy scheme we have to agree on what set of principles to use," he said.

"We will go on two premises. First of all those people who really need subsidies will be entitled to use the subsidy and those who can afford to pay near market prices then they should pay higher prices. So the system is a fairer system and should also be designed to discourage wastage and abuse." (Reporting by Ovais Subhani; Editing by Jan Dahinten)