Prime Minister Dr Mahathir Mohamad is looking at hiking the price of water sold to Singapore by more than 10 times.

In an interview with The Associated Press, Mahathir said the decades-old treaty governing the water agreement must be revised to reflect the increase in costs of living.

Under the current agreement which expires in 2061, Singapore receives 250 million gallons of raw water daily at 3 sen per 1,000 gallons.

Malaysia then purchases back a portion of that at 50 sen per 1,000 gallons.

In comparison, Mahathir said Johor has been supplying water to Malacca at 30 sen per 1,000 gallons - a rate he said was "charitable", given that it’s a domestic deal.

"To a foreign country, we need to get more than that," Mahathir was quoted as saying.

He, however, reportedly declined to discuss further details as discussions are still ongoing.

In first announcing Malaysia's plans to renegotiate the deal, Mahathir had dismissed as "ridiculous" the current 3 sen rate.

In response, Singapore said that terms of the agreement must be fully complied with until it expires in 2061.