Among the alternative fuels, vegetable oil is seen as a potential source of energy due to its readily available variety of sources and its certain physical properties that are comparable to those of diesel fuels. However, higher contents of triglyceride in vegetable oil contribute to higher viscosity and density that is affecting the inferior engine performance and emissions. The key properties, such as viscosity, density, and calorific value (CV), have a significant effect on fuel atomization, fuel combustion, and exhaust emissions. In this study, refined palm oil (RPO) was blended with a newly introduced novel biofuel, Melaleuca cajuputi oil (MCO), in order to reduce the viscosity and density and enhance blend properties. This blend is analyzed and compared with RPO-diesel and RPO-ethanol blends in terms of viscosity, CV, and density. These hybrid binary biofuel (HBB) blends were prepared on the volumetric basis of 10%, 20%, 30%, and 50% of MCO, ethanol, and diesel with RPO. The basic fuel properties and the correlation of temperature-viscosity-blend ratio were analyzed. The results showed that the MCO has comparable key properties to those of diesel fuels. The viscosity and density of HBB decrease as the fraction of MCO/ethanol/diesel increases in the blend. The higher the fraction of MCO/diesel in the blend, the higher is the CV observed. Notably, the viscosity of neat RPO and its blends is strongly influenced by temperature variations. The combination of blend technique and preheating had a substantial effect in reducing the viscosity and density of the HBB. Remarkably, the blend of MCO-RPO has the potential to highly considered as a new source of biofuel.