Malaysia plans direct fuel subsidies for buyers-paper

KUALA LUMPUR, June 1 (Reuters) - Malaysia want to scrap its policy of subsidising fuel at the pump and instead give discounts to individuals based on their needs, a newspaper said on Sunday.

"This means that prices at the pump will not be subsidised," Domestic Trade Minister Shahrir Samad was quoted as saying by the Malay-language Mingguan Malaysia.

"When a consumer buys it, he will get the subsidy. And that too only if he qualifies for the subsidy."

He said the criteria and the method of distribution under the new system could not yet be announced.

The minister had previously suggested requiring motorists to produce their Malaysian identification cards when filling up to ensure that only locals get the subsidies.

Malaysian fuel prices are among the lowest in Asia, thanks to hefty state subsidies. But cheap energy has encouraged wastage and smuggling to neighbouring countries where pump prices are much higher.

The Southeast Asian country has said its subsidy bill could hit a record 50 billion ringgit ($15.44 billion) this year as crude oil prices high record highs.

Soaring crude prices are straining the Malaysian government's finances and forcing the authorities to find ways to ease its subsidy bill by targeting subsidies only at the poor.

Deputy Prime Minister Najib Razak was quoted on Friday as saying the fuel subsidy revamp would be discussed at Wednesday's cabinet meeting. ($1=3.238 Malaysian Ringgit)

(Reporting by Liau Y-Sing; Editing by David Fox)