I found this article on the National Economic Action Council’s website on why the oil prices have been increasing and why the government cannot continue subsidising our fuel, as well as why Petronas cannot take up responsibility to use it’s profits to subsidise fuel. What do you think? Article is after the jump.
Why has the price of fuel on the international market increased recently?
Since mid-2004, the price of crude oil has increased substantially on the world market. For example, the West Texas Intermediate (a reference price used in the United States and globally) increased from US$19 per barrel in 1993 to US$31 in 2003. In October 2004, it reached US$51 and in 2005 it went up to US$67 per barrel.
The main causes for these increases are:
- The existence of a tight market due to the small margin between production (83.0 million barrels per day(bpd)) and demand (82.5 million bpd)
- High demand for oil by China, India and the United States
- Uncertainly of supply in some OPEC (Organization of Petroleum Exporting Countries) countries
- Adverse weather conditions such as Hurricane Emily in Mexico, affecting oil production
- Speculation on oil prices.
Our country produces oil. So why should we increase fuel prices?
The price of oil and petroleum products are determined by the international market based on supply and demand. These are factors beyond our control. OPEC also plays an important role in setting oil production levels which in turn, affect the market price. Although Malaysia produces and exports oil, we are not a member of OPEC, nor are we a major oil producing country. As such we have no influence on how the price of oil is determined in the international market.
If there is a large increase in oil prices on the world market, it affects the price of petroleum products such as diesel, petrol and cooking gas (LPG) in our country.
How do Malaysian fuel prices compare to neighbouring countries?
By comparison, fuel in Malaysia is much cheaper than most ASEAN countries. In fact, our prices are among the lowest in the world.
Due to the much lower prices of diesel in Malaysia compared to Thailand and Singapore, there is a big incentive for Thais and Singaporeans to buy petrol and diesel in our country.
How does the Government ensure fuel prices are cheaper compared to neighbouring countries?
The Government ensures a low price of petrol, diesel and cooking gas in Malaysia by exempting sales tax on diesel and petrol and providing subsidies for all products.
With the combination of subsidies and taxes forgone, the public can enjoy more affordable public transport. Subsidies also lower operating costs for fishermen and operators of river transportation in Sabah and Sarawak.
How are the retail prices of petroleum products in Malaysia determined?
The mechanism for setting retail prices of petroleum products has been in effect since 1983. In brief, the retail prices of petrol, diesel and LPG are set as follows:
Petroleum Products Cost + Operational Costs + Margin for Distributors of Petroleum Products + Commission for Owners of Petrol Stations + Sales Tax – Subsidies = Retail Price
The price mechanism is linked to international market prices. The actual product price is determined after taking into consideration prevailing international prices, operating costs such as distribution and marketing costs and finally, sales taxes. In Malaysia, fuel is sold much cheaper than other countries because the Government provides subsidies and sales tax exemptions.
For example, the retail price of RON97 petrol on 31 July 2005 is as follows:
Petroleum Products Retail Prices (sen per litre)
What are subsidies?
Subsidies are money paid to producers or retailers of a given product by the Government, in order to lower the retail price. It is a form of assistance for a given industry or segment of society.
How long will subsidies be maintained? Should they be abolished?
The Government will continue to provide fuel subsidies but the amount would be determined by the state of Government finances.
The Government is devising a more effective method to ensure that fuels like diesel and LPG are enjoyed by those truly requiring it such as fishermen, public transport operators and operators of river transportation in Sabah and Sarawak.
What are ‘taxes forgone?
Diesel and petrol are subject to sales taxes of 19.64 sen per litre and 58.62 sen per litre respectively. These taxes are revenue for the Government in addition to being a means of maintaining stable petroleum product prices. But the Government has decided to forgo this tax so that the retail price of petroleum products remains reasonable. This actually results in a loss of revenue for the Government.
Recently, the amount of taxes forgone has increased. For example, in 1993, RM190.8 million was forgone, while in 1999 it amounted to RM2.6 billion. This year, it has rocketed to RM7.9 billion. Sales tax exemptions for diesel began in October 1999 following increasing prices, while for petrol it began in June 2004.
What are the negative effects of subsidies?
One of the adverse effects of subsidies is market distortion, meaning the price of the commodity does not reflect its actual cost. This jeopardizes the national economy as it would lead to excessive fuel consumption and wastage in addition to unhealthy practices such as illicit trade, cheating and smuggling. The Government cannot permit the gap between market and subsidized prices to increase as this could encourage profiteering. Today, irresponsible parties make illegal profits by purchasing diesel at subsidized prices and selling it at higher prices to the non-subsidised sector.
Another outcome from heavy subsidies is the smuggling of fuel, particularly diesel, to neighbouring countries. This is akin to giving foreigners the subsidies intended for Malaysians. Our country suffers a great loss. Based on projected subsidies of RM6.6 billion for 2005, smuggling 10 percent of fuel out of Malaysia would be equivalent to an outflow of RM660 million.
The Government also has to spend more for enforcement personnel and equipment in order to arrest smuggling activities.
Also, huge subsidies are ‘opportunity costs which prevent us from allocating more to national development to benefit a larger segment of our population. Savings from subsidies could be used to build more schools, hospitals and public facilities which would provide long lasting benefits for our future generations.
Today, both the rich and the poor benefit from subsidies which are actually meant for the latter.
Subsidies also jeopardize the ability of the Government to reduce the budget deficit.
How much would fuel and petroleum products cost without subsidies?
Without subsidies, premium petrol (RON97) would cost RM2.45 per litre, and not RM1.62 that we are paying now. In fact when a consumer buys a litre of premium petrol in Peninsular Malaysia, the Government bears 82.82 sen that is 58.62 sen in the form of taxes forgone and 24.20 sen in subsidies.
The actual cost of diesel in Peninsular Malaysia is RM2.07 per litre. Consumers pay RM1.28 per litre because of the 59.13 sen subsidy and 19.64 sen tax forgone, per litre.
The unsubsidized retail price of cooking gas (LPG) in Peninsular Malaysia is RM2.39 per kg. However, consumers buy LPG at RM1.45 per kg. This means that there is a subsidy of 93.92 sen per kg. For example, a 12 kg cylinder of cooking gas costs RM17.40 when in fact, the actual cost is RM28.67. In other words, for each cylinder of cooking gas purchased, the Government subsidizes the consumer RM11.27.
How much does the Government spend on fuel subsidies?
The more fuel consumers use, the higher the amount borne by the Government for subsidies.
As illustrated in Table 5, subsidies in 2001 were RM2.4 billion based on an average WTI crude oil price of US$25.24 per barrel. In 2004, the subsidies increased to RM4.8 billion based on the average international oil price of US$41.60 per barrel.
This does not factor the loss of revenue from taxes which has also been increasing. Losses in 2002 of RM3.3 billion rose to RM4.8 billion in 2003 and reached RM7.2 billion in 2004.
By increasing the retail prices of diesel and petrol on July 31 2005, the Government will save RM1 billion on subsidies. For 2005 subsidies are now expected to be RM6.6 billion compared to RM7.6 billion before the price increase (2004 subsidies totalled RM4.8 billion).
Large subsidies are ‘opportunity costs as the substantial amount of money could be better used to benefit the rakyat, for example, by building schools or public amenities.
The Country benefits from increased oil prices. Why cant the Government increase its subsidies?
When oil prices rise, the Governments revenue increases accordingly. However, subsidies borne by the Government also increase from RM4.8 billion in 2004 to a projected RM6.6 billion in 2005.
It is true that as oil prices on the global market increase, the countrys export earnings from oil goes up. However, the Government chooses to spend this additional income responsibly. It would be unwise of the Government to utilize the additional income earned to fully subsidize fuel prices.
We must remember that gains from the increase in oil prices will only benefit us in the short term. In the medium term, subsequent increases in oil prices will adversely impact the world economy and being an open economy Malaysian exports would reduce and consequently national income contracts. As such, in the medium term an increase in oil prices does not benefit us.
Furthermore, we still have to import to meet some of our domestic oil needs. While it is true that we gain from exports of oil at higher prices, we still have to pay more for the oil that we import.
What is the impact of subsidies on Government finances?
Subsidies and tax exemptions impact Government finances in five ways:-
First, it results in an increase of the operating expenditure. Subsidies of RM6.6 billion in 2005 represent 7.4 percent of operating expenditure. Without subsidies, the fiscal deficit could be reduced.
Second, if the savings are not used to reduce the deficit, it could instead be utilized for development. RM6.6 billion spent on subsidies represents 23.3 percent of the 2005 development budget, which is equivalent to building 600 secondary schools assuming it costs RM11 million to build one school.
Third, tax revenue forgone represents a loss in revenue for Government. Sales tax revenue forgone of RM7.9 billion in 2005 represents 8 percent of revenue. If collected, this money could be used to build 316,000 low cost houses.
Fourth, subsidies and sales tax forgone amounting to RM14.5 billion is sufficient to reduce the fiscal deficit from 3.8% of GDP to 0.7% of GDP for 2005. This would in turn strengthen the Governments financial position.
Fifth, a small deficit means that the Government can reduce its borrowings.
Should the Government use up contributions by PETRONAS to pay for subsidies?
In fact, contributions by PETRONAS are sufficient to fully cover fuel subsidies. However, spending on subsidies are one-off expenditures which do not generate further income for the nation and its people. Although the Government could fund increased subsidies, it would not be the most prudent course of action as it would adversely affect funding for other productive projects.
If the rakyat and Government can share the cost of rising fuel prices, thus reducing the need for subsidies, a part of the contributions from PETRONAS can instead be directed to generate new sources of income.
PETRONAS profits have increased due to rising oil prices. Shouldnt PETRONAS contribute more to absorb the cost of rising fuel prices?
Since its establishment in 1974 PETRONAS has made significant contributions to the nations development. During the financial year 2004/2005 it contributed RM31 billion in the form of taxes, dividends and royalties. This was an increase of 47% over the previous years contribution. This amount represents 53% of PETRONAS gross profits of RM59 billion for the year 2004/2005.
PETRONAS only controls 30% of the Malaysia retail petroleum market while the remainder is held by competitors like Shell, Esso, Caltex, BP, Mobil and Projet. This means that if PETRONAS were to subsidise fuel prices in full, it would effectively be paying these foreign companies too.
In Malaysia, PETRONAS owns 3 refineries with a combined capacity of 256,000 barrels per day (bpd), or 47% of the total national output. The remaining 53% is provided by refineries owned by Shell (155,000 bpd), Exxon-Mobil (88,000 bpd) and ConocoPhillips (48,000 bpd). As Malaysia consumes 520,000 barrels of oil per day, it is obvious that in order to meet this demand we need to rely on refineries belonging to international oil companies too.
PETRONAS also subsidizes natural gas in this country. This subsidy amounted to RM25 billion since May 1997. For the power sector, the price of gas is fixed at RM6.40 per Million British Thermal Unit (mmbtu) compared to the commercial price of RM25.70 per mmbtu. This low price has enabled Malaysia to maintain electricity tariffs at reasonable levels.
What would happen if PETRONAS were to use all its profits to provide subsidies?
PETRONAS is a business entity with domestic and international operations. If a substantial portion of its profits were used to provide subsidies it might be perceived as an irresponsible company, thus affecting its credibility. This could result in it being downgraded by international rating agencies.
PETRONAS primary role is to manage and preserve our countrys oil and gas resources. In order to achieve this, profits must be reinvested into exploration activities both domestically and internationally. In addition, profits should also be spent on research and development.
In the financial year 2004/2005 PETRONAS spent 61% of its total investments, or RM10.7 billion in exploration activities. If there are no new oil discoveries, Malaysia will become a net importer of oil by 2009.
Such investments in exploration have resulted in annual increases of oil reserves by 2 – 3% annually. Clearly, this would not be possible if PETRONAS uses all its profits for subsidies.
What options are open to the Government in addressing the increase in oil prices?
The Government has three options:
- To maintain the retail price of petroleum despite rising international market prices. This would require the Government to increase subsidies and taxes forgone to match the rise in product cost, resulting in an even larger gap between subsidised and market prices of fuel. This would result in less money available for development and would impose severe strains on the Governments financial position; or
- To completely remove subsidies and reimpose sales taxes; thus allowing fuel prices to be determined solely by market forces. If this is done, there will be no disparity between retail prices in Malaysia and world market prices. This option would allow the Government to use savings from subsidies to fund development. However, consumers would have to bear the full brunt of price increases and the Government might be perceived as being insensitive to their needs; or finally
- To gradually reduce subsidies; as has been done in recent months. This middle path involves the sharing of burden between the Government and consumer. In this option consumers pay slightly more for fuel while the Government continues to provide subsidies. By increasing prices gradually, consumers will be able to adjust their expenditure accordingly.
The Government is of the view that the gap between domestic retail and world prices should be reduced gradually. From the three options listed above, the third is the best. The Government will continue to provide subsidies while the consumer contributes by sharing some of the burden.
What steps are the Government taking to encourage the use of alternative energy sources?
The Government is encouraging the use of natural gas vehicles (NGV). Incentives include a discount of 50% for road tax of monogas vehicles and 25% for bi-fuel (diesel) and dual-fuel (petrol) vehicles; and fixing the price of NGV at about half that of petrol pump prices.
The Government is also encouraging the use of renewable energy under the Small Renewable Energy Programme (SREP), for the generation of electricity under 10 MW using biomass, landfill gas and mini-hydro.
Hydroelectric power is being developed in Bakun which has a capacity of 2,400 MW. This project is due for completion in 2010.
The Government intends to introduce the use of green fuels such as biodiesel, using palm oil.
As consumers, what role can the rakyat play?
Following oil price increases certain traders may take the opportunity to profiteer. As such, the rakyat must be prudent and smart in their spending.
It is also good practice for shoppers and customers to compare prices and the quality of goods between shops prior to making purchases. Such buying habits will contribute directly to improved family finances.
Through prudent planning and spending, consumers will also prevent wastage.
The transportation sector constitutes 41% of energy consumption. With prior planning of trips, car pooling and the use of public transport, the expenditure on fuel could be reduced.
What measures need to be taken by the rakyat?
The rakyat should realize that Malaysia could be completely without oil in 19 years. Therefore, we must be prudent in our use of oil resources. We must find ways to reduce our dependency on oil and should be prudent in its use and avoid wastage. We should consider using alternative energy sources such as biofuel.
Some countries have already implemented radical energy conservation measures. Malaysians have to be prudent in their consumption of energy and should support the Governments actions in energy efficiency and saving measures.
The Government will go down hard on irresponsible traders who profiteer from the current situation. Consumers can play a crucial role by reporting unethical practices by traders to the relevant authorities. Traders and businessmen on their part must be responsible and not exploit the public by raising the price of goods and services indiscriminately.
Economic Planning Unit
Prime Ministers Department
31st August 2005
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Good explanations and clarifications from the government.
It's time we as consumers stopped being selfish and start thinking for the world!
i have no problems in the gov increasing prices when costs or world prices go up. however, when cost or world prices go down, why does our gov not reduce the price as well?
the best way would be to remove subsidy all together. let people pay for what they use. certain people can get exemptions or subsidies. fuel for these people can be differentiated from normal fuel by colouring, say. this way, the gov saves on spending (subsidy) and gain on taxes.
er, abit the old news. :/
old news….but then….pls stop protecting Proton then…..take of the car tax….
then we can save a lot for car fuel as well….
n if such concious on reducing the use….
open for cars like toyota prius to enter malaysia…
n exempt tax
encourage more malaysian to buy such fuel saving car…..
don jz tell us to do thing….
do the right thing from ur side too…..
we need a worthy car to drive n save….
not a cheap-plugged car n minum petrol….
I've said it before and i'll say it again, I'm greatful that the Malaysian Government did not raise fuel prices as high as some countries did…
ohhhh toyota prius.when r u going to reach malaysia?????
aiiiihhhh….. once again, the silly statics in the "who has the cheapest petrol in Asia" part… at this time, the exchange rate for Sing Dollars is 1 SGD = 2.262MYR. So, according to the table above, S'poreans pay RM3.19/2.262 = SGD1.41 per litre of petrol. If you take the currencies as 1:1, they are paying 1.41 while we are paying 1.62. You HAVE to take the currences as 1:1 because if we earn RM1500 a month as a clerk, they will earn SGD1,500 in S'pore. This is a verrrrry rough example, but you know what I mean… Converting everything to one currency and then saying he is cheaper, she is more expensive, etc, is akin to saying that the bus fares in UK are a rip off because they pay RM6 (approx 1 pound) and we only pay RM1…
But other than being nitpicky and all about that statistics part, I'm grateful to the Govt. for providing the subsidy. Imagine life if our Govt. were to do what the Indon Govt. did; suddenly raise the price by cutting the subsidy by 3/4 or more. There'd be rioting and worse, man!
An experiment done by 5th Gear, a rival TV show to Top gear, quite sometime ago showed that a diesel car (I can't remember which one) had better fuel consumption than the Prius.
With all the improvements to diesel engines, I personally think Malaysian's would be better off using diesel cars. Even Europeans are quite sceptical about hybrids, especially due to the longer term costs (maintenence, etc).
speechless :|
All these while i have been wondering why Petronas has not step up to help cover the subsidiary. Well, at least i feel better after reading this article.
All i can say is that, i am going to go for hybrid car or electric car after 10 years from now. Can you imagine that the entire petroleum source will be dry 19 years from now !! That will be equivalent to owing 3 consequtive cars for a period of 6 years each. And by the time, your car has 0 second hand value. As no more petrol available to power the engine. Oh my god, i better get my dream car and start enjoy before it is too late.
old news… i have a copy of that document in pdf format, it happened to be posted up in some forum and i personally have attacked some of its ridiculous and absurd reason… but then now i felt lazy to repeat what i have said it… guess some of the ppl would realise it's absurdity sooner or later.
why it keep mentioning the building of additional secondary schools? keep building new schools and not increasing the benefit and standard of our teachers ?? funny article…
G should hv 2 type s of diesel sold, one for the poor, ie fisherman , n the other 4 consumer which drives. the driving type of diesel should be of the best quality n the one for the poor stay at the same lvl. Then, all those best diesel cars can come in n we can use our diesel on them. The G potong taxes on diesel vehicles. Like this so good, good 4 the car, environment, money, the poor n the list goes on n on……
I agree that diesel cars should start to come into Malaysia in full force… which was one of the reasons i thought that the VW-Proton tie up was such a good idea. Proton will be is a very unique position to market (european) diesel cars in this region.. heck they can even rival Toyota fair and square… but nooooooooo…
anyway, screw that… about Petronas and the fuel subsidy.. does this mean its a good idea to use more Petronas fuel?. I mean the more money they get, the more they have the capacity to subsidise, right?
diesel? let's not forget hybrid as well… these are the cars in (short-term) future… untill when the tech catches up, when non-petrol cars is the norm on the road.
i still remember one tech show back in 1999, got one prototype SPORTS car from MacLaren (if i can stil remember correctly) that runs on hydrogen-something battery… really a runner, got show forgot how many seconds 0-100km/j also, but bcoz batt capacity is still low so the mileage also low lor… the body is made with carbon fibre… i wonder how is the progress now…
Govenment should tax those using cars/SUV/FWD with more than 2000 cc more. The more they use petrol the more we (those with smaller engines) are subsidising them, it is rediculous to see some big FWD that cost less than RM 100,000.
Congrats Paul for posting some educational info, eventhough its debatable.
Hopefully Gov can speed up on promoting NGV in term of of tax deduction, more NGV station in small town, etc.
Hopefuly our researcher can improvise the biofuel such as palm oil as substitute to petrol.
Well after all the oil gone, time to ride the horsey…yeehaa.cowboy era.
i knew it already….
it suppose the gov should continue the subsidaries… BUT come on laa the statement of "we who has the cheapest petrol in Asia" cannot be considered, we already know what?? our income per capita in household is less, we have to pay road-tax someore and lot of highway here (in KL itself? got heavy traffic jam??) have lotsa toll and bank are not very friendly to charge petrol using credit… so dont EVER say that we pay LESS for our petrol compared to others…
the gov should consider to sell more diesel/ngv/hybrid cars (with new diesel tech or bio-diesel) and also give special tax rate for diesel car below
1,800cc (aper? takut those oil companies tak bleh carik makan kaa??) p1 also should sell new models with these engines….
Waja 1.6 won green car award and outdo those hibrids in Australia.
When people provide with explanation..some of us din appreciate it…..sigh..what to do..in INdia the price of oil is approximately RM 4.00 (10.27 Litres = 500 rupees & RM 1 ~ 12 rupees (approx) ). Be thankful….god has provide us a great cuntry to live…..sure there are minority who are seeing only $$$ and power ..but not let us be like them..stay strong as a malaysian ..
Man…
dont just simply shoot from ur arse-mouth. though what u had said are utterly unbelieveable to me, (what? a normal engine has better consumption and emission than a hybrid?), i'm willing to let some space.
show us proofs. post up links on where u get the news that Waja beats those hybrids in green car awards in Australia. what green car award? in what terms? (which car's green colour paint is better looking?) and based on which benchmark? if u can prove it, then it's ok for saying so. if u cant, it means u're just lying…
spoken words represent the speaker. have some respect for urself. u might think u "gaya" like a hero, just simply blast in and start shooting everything that moves… but u might just not only shoot the hostage, but also shoot urself on ur own feet.
waiting for ur proof.
Whatever the article says, we have to ask ourselves. Petronas have over RM50bil profits from oil price increase, how much is our subsidies, RM5 bil?
Where the profits go to? Another right hand-left hand syndrome?
G should let honda M'sia bring in Honda Civic hybrid n sell it to the public (( I know certain Honda ppl hv this hybrid)) at a cheaper price. make sure the parts r fairly reasonable. Then, everybody will buy. With this hybrid, we can save
!) petrol,
2) rakyat's pocket,
3) fuel subsidiaries,
4) G's pocket,
5) environment n many more………if anybody hv other ideas, then tambahlah!
But petrol companies will bising coz can't sell byk petrol!
G should encourage the imports of such vehicles in big numbers since local car maker can't produce one. Hope they dun block the imports coz proton belum buat such car!!!!
"Ask not what your country can do for you, ask what you can do for your country."
~ John F. Kennedy, U. S. President (1917-1963) ~
please don't be selfish. sometimes we have to think about the poor also…
Upon the rising fuel price in Malaysia….i do see that many middle class people are feeling the pinch. What can we do. Despite the goverment's effort in sibsidising fuel still a bunch of us are already finding it difficult.
We have our utilities to pay, car, fuel, road tax, insurance, insurance, tax, epf deduction, grocery, shopping, parking, toll etc….just imagine the amount of money being unleashed from our pockets.
Wow…..i hope they (the world) can produce some hybrid vehicles. It's already time for the technology to change.
The rich ones will not feel the pinch …. but the poor ones will.
Looking at the price of fuel at other Asean countries is a boom ! I believe the prices doesn't decrease………….always increases.
People … what can we do to overcome this ?
Yes Hybrids are the way of the future, but that does mean that its the end of the line for diesel. Mercecdes-Benz is working on a Diesel Hybrid that actually promises to give heavy battle to Toyota. But before you can even bring in those Diesel Hybrids, diesel cars have to come in first…
About the Waja.. Yes it has good fuel economy. but its no attribute to Proton's engieering finess, rather to the Mitsubishi engine. however foreigners cannot understand the logic behind putting a 1.6L into such a large car… think bout it.. the small Ford Fiesta uses a 1.6L engine. Other than Lotus input, everything about the Waja is not up to standard, which is why NO Wajas have been sold in Australia the past few months….
I think they should just design a Gen2 sedan and do away with the Waja…
Mahatir asked Petronas to built F1 , Twin tower, no hesitation string proceed without question. How many billions there?
I agree with Quest. 5billion over 50 Billion with the raw material FOC under Malaysia soil??
I think tax impose is much lower than they suppose to pay.
And when oil price increase, we are not talking about petrol only . Plastic industry ,chemical industry, rubber industry all depend of the output from stages of crude oil process to get different type of oil grade for production.
Pls dont think it's only petrol that affected.
Ihateproton,
Japanese car maker know how to bring more torque to same CC of car.
To Ihateproton,
FYI, ~50% of ANY engine's power is used (or wasted) to overcome aerodynamic drag @ 100km/h! The percentage or energy wasted increases along with speed.
Aerodynamic drag is determined by shape and design of the car. Put the Waja engine into a mini SUV like a Vitara and calibrate the weight of the car to match Waja's taking off the extra seats or such and I guarantee you that the fuel economy will suffer. Therefore, aerodynamic efficiency is equally important as powertrain efficiency.
On diesel v hybrid however, modern diesel are very advanced indeed. With modern diesels engines, you will be able to travel at least 40% more distance with the same amount of fuel as compared to a comparable petrol engine (in terms of power & torque). That is the amount of savings you would get in a petrol v hybrid situation. The diesel will achieve those figures with a more conventional body styling as compared to body of hybrid cars which normally are specifically designed to meet fuel efficiency goals.
Diesel engines are built robust, allowing you to start and go without warming up. Hybrids are not. Think of the cost of buying the battery pack if they get damaged in 5~10 years' time. I stand corrected.
we gonna face the high petrol price very soon… 2006 is coming…
oil storage decreasing… damm ah…
cheers…
Isamu,
Thanks for the info. I guess the question now would be: if you can transplant the waja's 4G16 mitsu engine into another sedan, would you get better or worse fuel economy?.. how good was the fuel economy of the old 1.6 wira?
oh ya… and how much does fuel economy suffer if you constantly travel in the city at speeds never reaching 100km/h?
i once read an aritcle about hybrids vs diesels and the conclusion here was that diesels were better suited for long distance driving while hybrid better for city use. in the city the stop start driving uses a lot of breaking which would charge the batteries, and it would save fuel because the battries would accelerate the car from stop keeping the internal combustion engine off at that time.
In long distance driving the batteries would have less of a function compared to city driving and the diesel would emerge with better numbers.
about the difference between hybrid diesels vs hybrid petrols.. i dont know about the nitty gritty details. I thought you would get diesel fuel economy minus whatever the battery can save…
to Zoom,
I thought that diesel engines have better torque at lower RPM compared to petrol engines?…regardless of which country they come form..
Many things had been said about this topic. Since I couldn't sleep let me just add a few of my sleepy comments :-
1) Oil price is up and the govt subsidies uncreases. Fine. But what about the increase profit of petronas ? The difference in the profit btw low oil & high oil price is huge . The difference should be set aside to cover for the additional subsidies. They are after all our national oil company. BOTTOM LINE IS THAT WE ARE A NET EXPORTER OF OIL . CLEAR & SIMPLE.
2) I think the diff above is enough to cover for the subsidies of the other foreign oil refineries . As for tax revenue lost – COMMON , GIVE US A BREAK. OIL PRICES WILL DETERMINE OUR CPI . NOT JUST PETROL PRICES BUT THE SPIRAL EFFECT ON BASIC GOODS.
3) If govt need some extra revenue to cover for the oil subsidies , it is about time to tax to snobbish car coming from our " southern neighbour". Shit they
make m'sian car pay S$20 per day to go across the causeway. Make them pay RM 44 on our side. Easy money.
4) Those 3 litres & above cars should pay higher road tax. Maybe triple. The idea of some about making it easy to bring in Hybrid car is good. But them , govt need car tax too ( many mouth to feed right ? ) and after these cars go through AP kings , the price will be beyond most of us. Finally end up as senior govt official preferred car to show environmental concern. Something like proton chancellor.
I think I will go and buy a proton savvy amt tomorrow. Just in case petrol price go up next 2 weeks.
ON 2ND THOUGHT , BETTER NOT. I ALREADY CANNOT SLEEP. THINKING OF BUYING ANOTHER PROTON CAR WILL MAKE GO INSANE.Better do some ear-squat exercise . Maybe can sleep…….so long I don't lau sai…ha ha ha
To Ihateproton,
I have no doubt that the 4G18 is quite an efficient engine as compared to most 1.6 litre engines, especially the Korean ones. If the target body of the sedan has comparable weight and aerodynamic factors, I'm quite sure that the 4G18 engine can provide good mileage which should be able match the sedan's original engine.
Having said that, where else can you find (in Malaysia) a 1.6/1.8 litre class sedan car (without ABS and Traction Control) which can handle as well as Waja? IMHO, it is by far one of the best handling sedan of its class. Altis 1.6 has scary handling while the Civic 1.7 is just average. I suspect the only car which can beat the Waja in terms of handling is the Ford Focus.
I would still choose any sporty diesel car as compared to hybrid because I know how to make it run on KFC and McD oils. That would be a lot more efficient in monetary terms.
Man said,
December 16, 2005 @ 9:54 am
Waja 1.6 won green car award and outdo those hibrids in Australia.
=============================================
i'm still waiting for somebody to prove his words here….
It was in 2004, written by somebody called Chips in a malaysian auto magazine based on greenvehicle guide Australia.
post up a link here to the story. then i'll see.
Chips? Malaysian auto mag? u're not talking about Motor Trader, are u?
others country petrol price high,
car price cheaper that ours.
mayb nxt few months,malaysia petrol price increase,
car price still expensive…cos of potong…
protect,protect,protect,protect,protect,protect…..
n ours smart gorverment should say…increse price,cos we can save money n use it in other….
but we dunt know they use IT in where???how to spend money???
To Isamu,
You must be a Proton engineer.
I agreed with you on better performance of new generation of diesel engines in European cars, but is our local diesel up to it???
how much government subsidy before increase Rm0.20
This may be a little late for commenting on this article, but I have notice that the operational cost for the chart titled (Petroleum Product retail prices) for each peninsular Sabah and Sarawak is different. My question is what would be the driving factor in this diferences? hope someone could answet to that. Thank you in advance.