Malaysia to start reforming fuel subsidy on Wednesday

KUALA LUMPUR, June 2 (Reuters) - Malaysia will take the first step towards revamping its fuel subsidy system on Wednesday, Domestic Trade Minister Shahrir Samad said on Monday. "This announcement is an incremental step towards the total restructuring in fuel subsidies in August," Shahrir told Reuters by telephone. "Wednesday's announcement will be an indication of the direction we will take."

He was asked to elaborate on Prime Minister Abdullah Ahmad Badawi's comment that Malaysia would announce its fuel subsidy plan on Wednesday, with the measures to take immediate effect.

Shahrir had earlier said the government would raise pump prices for petrol and diesel in August although subsidies would remain for the poor.

(Reporting by Niluksi Koswanage; Editing by Liau Y-Sing)