PUTRAJAYA, Oct 18 - Malaysia is moving to reduce its dependence on fuel,with no end in sight of the continuing increase in global oil prices.And this new orientation will result in the Government studying how to:

- increase the use of natural gas vehicles in the transportation system;

- use palm oil as biofuel;

-encourage more offices to follow the Low Energy Office concept, where thepremium is on saving energy;

- promote the use of renewable energy; and

- tap alternative sources of energy, including solar energy and biomass.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said the price of crudeoil in the world market had been increasing significantly since thebeginning of the year.

The price hike has forced the Government to shoulder a considerably higherpetroleum subsidy. This year, the subsidy is expected to be in the regionof RM4.2 billion while revenue forgone is about RM7.3 billion.

The price of per barrel of crude oil has exceeded US$50 (RM190) and theamount of subsidy is expected to go up if the oil price increases further.

Taking into account these considerations, the Cabinet decided on Oct 13 toset up a committee to study the impact of the rising oil price on theeconomy.

The committee, chaired by Abdullah, met for the first time today. Besideslooking at ways to reduce dependence on oil, the committee also studiedthe impact of the pump price increase on the economy.

"The meeting also noted that the five-sen per litre increase of petroleumproducts has had minimum impact on the Consumer Price Index," the PrimeMinister said in a statement.

Therefore, Abdullah reminded traders to refrain from raising pricesindiscriminately. "The Government will take stern action against those whotake the opportunity to do so."

Abdullah said the meeting also agreed to come down hard on dieselsmuggling.

Meanwhile, Deputy Prime Minister Datuk Seri Najib Razak said theGovernment needed to study ways to reduce the petrol subsidy.

"We want to know whether the right people are receiving these subsidies.There are so many people out there who are rich enough to afford two orthree cars and yet are receiving subsidies," he said after launching abook titled Between Blood & Bombs by Shahanaaz Habib, an assistant editorwith The Star.