The government has 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.

"Effective from tomorrow, June 5, 2008, the price of petrol will be raised by 78 sen and the price of diesel will be raised by RM1," Prime Minister Abdullah Ahmad Badawi told a 50-minute press conference at his office in Putrajaya.

The price of diesel will increase by a whopping 63.3 percent - from RM1.58 per litre to RM2.58.

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

At a press conference held at 5.30pm, Abdullah 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 an annual rebate of RM625 to compensate for 800 litres of fuel used under the new price.

"Owners of private motorcycles of engine capacity of up to 250cc will be paid a cash rebate of RM150 per year," he said.

According to the prime minister, the money will be paid by money order. Rebate will be paid when motorists renew the road tax for their vehicles.

- Extracted from Malaysiakini.com