A fall in global crude oil prices have prompted the federal government to drop RON97 prices from RM2.90 to RM2.80 per litre, effective tomorrow.

However, prices of the RON95 grade petrol will remain at RM1.90 per litre, which the government claims cost them RM2 billion in monthly subsidies to maintain.

Sources close to cabinet said since the price of RON97 is determined by a managed float, prices will fluctuate. The price of RON97 was increased four times last year.

Last May, crude oil prices breached US$100 (RM310) per barrel. Currently, it is hovering below the US$100 mark.

RON97 grade petrol used to be the most common form of petrol until 2009, which saw the introduction of the cheaper RON95.

The Najib administration is trying to reduce its subsidy bill to reign in on its burgeoning budget deficit, but allowing fuel prices to rise will become a obstacle for its ambitious growth targets.

A check with the petrol dealers at 4pm showed that they have yet to receive any notice from the authorities.