For every litre of RON 95, the actual price is RM2.75, and the price of RM1.90 at the pump translates to a subsidy of 85 sen, or 31% of the actual price.

Diesel has an actual price of RM2.66, and the RM1.80 retail price works out to a subsidy of 86 sen, which works out to 32%.

As for cooking gas, every 14 kg tank is actually priced at RM48.02, and the retail price of RM26.60 means that the Government subsidy works out to RM21.43 or 45% of the actual price. We’ll have more updates on related items as we go along.

© 2012 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 27 May 12 13:17:33 +0000.

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The roll-out of palm oil-based B5 biodiesel for the central region continued today, with the introduction of the fuel for the Federal Territory. The event to mark the introduction was held at a BHPetrol station in Jalan Kuching this morning, and present at proceedings was Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, who officially launched the fuel at the retail level in June, as scheduled.

Kuala Lumpur is the fourth location in the central region to introduce B5; Putrajaya kicked the programme off on June 1, followed by Malacca and Negeri Sembilan. The KL roll-out is just over a month later than planned – B5 was slated to be introduced here on September 1. Selangor is the next on the list, on October 1, according to the schedule.

The B5 programme for KL will see B5 being supplied by 247 stations, and through this, 890 tonnes or 1.03 million litres of palm-oil biodiesel will be used per month, which will contribute to saving the connsumption of nearly 12.4 million litres of fossil-based diesel a year in KL.

Priced at the equivalent of petroleum diesel, at RM1.80 per litre, Dompok said that the government would continue to keep the price of B5 as such, and absorb the differences. He also said that full B5 supply nationwide would be implemented in 2013 at the earliest.

Meanwhile, BHPetrol said that B5 is available in its 35 stations in KL, and currently has around 60 stations offering the fuel in the central region.

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5. B5 biodiesel: pure palm biodiesel (B100) sulphur content less than 10ppm
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7. Malaysian B5 biodiesel at pumps to comply with MS2008 based on EN14214 biodiesel standard

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Apparently, the column listing the properties of the total sulphur content for both in a photo recapture I took was from a booklet published by the Malaysian Palm Oil Board in August 2009 (third edition). The datasheet listed the sulphur content of B5 as 0.26% and Malaysian petroleum diesel as 0.28%, essentially 2,600 and 2,800 ppm, which met the MS123:1993 0.50% maximum sulphur content requirement which was still in effect at the time of printing.

According to Puah Chiew Wei, research officer in the engineering & processing research division at the MPOB, the current sulphur content of 100% pure palm biodiesel is <10 ppm (<0.001%) which meets the stringent requirements of MS2008:2008 and EN14214:2008.

Malaysian petroleum diesel currently has a sulphur content of 300 to 400 ppm (0.03 to 0.04%). Puah adds that the low sulphur palm biodiesel thus contributes to reduction of sulphur content in B5, and as such, B5 meets the requirement of maximum sulphur content of 0.05% as stipulated under MS123:2005.

Apparently again, the booklet wasn’t officially distributed at the launch, but it was inserted into the press kit bag anyway by someone who saw fit to do so – time to print an updated booklet, perhaps?

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2. Malaysian B5 biodiesel at pumps to comply with MS2008 based on EN14214 biodiesel standard

With the introduction, Malaysia becomes the second country to implement the use of B5 (Indonesia has been using it since 2006 in selected cities and provinces), which is of course higher than the mandatory B2 (2%) blend in Thailand started in April 2008 and the B1 mandated in the Philippines, which was introduced in May 2007.

It’s actually been around for a while, B5 has – since February 2009, no less than 3,900 vehicles from various government agencies such as DBKL and the Armed Forces have been conducting test usage of the fuel, with no adverse effects reported to date.

From today, however, it is available at point of retail: B5 biodiesel will be sold at the six petrol stations – five from Petronas and one from Shell – located in Putrajaya, the first location in the Central Region to deploy the fuel. It is priced at the equivalent of petroleum diesel, at RM1.80 per litre.

As it goes along, the fuel will be made available in other locations in the Central Region. The next to launch B5 will be Malacca on July 1, followed by Negeri Sembilan on August 1. Stations in Kuala Lumpur will begin selling B5 on September 1, and then Selangor will follow suit on October 1. The implementation of B5 in other regions in the Peninsular as well as in Sabah and Sarawak as part of the planned nationwide coverage will be announced in due time.

At this initial stage, the deployment of B5 will cover the land transport sector, which encompasses private cars, those in the civil service as well as commercial vehicles. From November 1, B5 will begin to cover the industrial and fisheries sectors as well.

To ensure the success of the programme, the government, through the Malaysian Palm Oil Board, has allocated a sum of RM43.1 million to finance the development of in-line blending facilities at six petroleum depots in the Central Region.

The facilities are owned by five oil companies, namely Petronas Dagangan, Shell Malaysia Trading, Esso Malaysia, Chevron Malaysia and Boustead Petroleum Marketing. Three of these depots are located in Selangor – two in Port Klang and the Klang Valley Distribution Terminal in Dengkil. Two other depots are located in Port Dickson, and the last is at Tangga Batu in Malacca.

The notes provided at the launch had a comparative table of the fuel properties of the MS2008 compliant B5 palm biodiesel and petroleum diesel in the country, as represented in the photo recapture below.

Click to enlarge

As far as performance goes, engine performance aspects of the B5 palm biodiesel (methyl esters) blend compared to petroleum diesel are a decrease in ignition delay (due to a presence of oxygen), lower smoke emission and volatility levels for B5.

It also has a slightly higher brake specific fuel consumption and NOx emission (which is still well below the regulated level) and exhibits a comparable thermal efficiency and the same combustion pressure patterns – with no adverse effect in terms of knocking – as petroleum diesel. It does however offer slightly lower brake power, due to a low calorific value.

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3. Malaysian B5 biodiesel at pumps to comply with MS2008 based on EN14214 biodiesel standard

B5 is a blend of 95% regular petroleum-based diesel and 5% biodiesel. This source of biodiesel can be from various sources. Different countries with different climates typically choose a feedstock source that is most suitable with the environmental (mostly temperature) conditions in which the fuel has to work in.

For us, the feedstock that makes the most sense is palm oil, given that we are one of the biggest producers of palm oil around, and the properties of palm oil-based biodiesel are suitable for our climate. For example, we do not have to worry about winter temperatures. Palm oil based biodiesel tends to have incrementally worse cold weather operability.

Sime Darby Plantations have already started using its own blend of biodiesel called Bio-N in its upstream operation vehicles since March 2008. The Bio-N initiative started at the East and West Estates and Mills on Carey Island and later expanded to other estates and oil mills in Selangor and Negeri Sembilan. Bio-N started off as a B5 blend, but for some estates this mix have been upped to B10. Bio-N’s palm oil comes from Sime Darby’s biodiesel plant in Teluk Panglima Garang and Pulau Carey.

Sime Darby demonstrated Bio-N in a BMW 730Ld company car

We have no idea what specs Bio-N complies to, but we won’t be pumping Bio-N into our tanks next month. According to a Petronas source, what we will be using is a biodiesel blend that complies to the MS2008 standard, which is derived from the international EN14214 standard for biodiesel fuel.

MS2008 (Automotive Fuels – Palm Methyl Esters for Diesel Engines – Requirements and Test Methods) is essentially a localized EN14214 standard, and as its name suggests it was established in 2008 by the Department of Standards Malaysia. It was developed with an Industry Standards Committee consisting of 17 organizations, and a Technical Committee consisting of 16 organizations, which include all the fuel retailers in Malaysia as well as SIRIM, AAM and JPJ.

Instead of the European EN14214 typically using rapeseed as its source, Malaysian MS2008 is using palm oil. The table below shows some key differences between the properties of MS2008 biodiesel and EN14214 biodiesel:

For the first 6 months upon introduction, the Ministry of Plantation Industries and Commodities require that the fuel retailers obtain their feedstock source from the Malaysia Biodiesel Association’s 21 members. There are already at least 10 active biodiesel plants in Malaysia – operated by subsidiaries and JV companies of groups like Sime Darby, IJM, and Boustead.

According to Caltex Senior Product Engineering Specialist Greg Engeler, all diesel engines should theoretically be able to run B5 without issues. It’s only the higher biodiesel mixes which need re-engineering. For example, the fuel cap on the F10 BMW 520d says you can use a maximum of B7 biodiesel, which means it should run properly on B5 biodiesel.

According to a source in BMW Malaysia, their cars should run fine on MS2008, since its properties pretty much correspond or in certain cases better EN14214. Sime Darby AutoConneXion also says their portfolio of diesel cars under the Ford and Land Rover brands including the Ford Focus TDCi should run fine on EN14214.

You won’t be able to choose between regular diesel and B5 biodiesel at fuel stations that have started selling biodiesel. B5 biodiesel will replace regular diesel at existing stations. However, according to a Petronas source as of last week the Government has not given any firm sign to 100% replace standard diesel to biodiesel nationwide. It has been made clear so far that the implementation of B5 will only be in the Central Region, which for example includes areas such as Putrajaya, Selangor, Melaka and Negeri Sembilan.

This doesn’t mean B5 will be contained to only the Central Region though, it just means there hasn’t been any official directive or gameplan for a nationwide roll-out yet. B5 will cut our dependence on fossil fuels, but you guessed it right – by about 5%. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok says the B5 blend’s price mechanism will be regulated and determined by the Finance Ministry. It’s not very clear at the moment whether B5 will eventually be priced differently from normal diesel.

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However, with the subsidy for petroleum products set to baloon to a massive RM18 billion this year, it’s just a matter of time before pump prices go up. The current price of RON95 petrol is RM1.90 per litre, as opposed to RON97′s RM2.90 per litre after the recent round of revision. The government has already announced that super subsidy diesel for commercial vehicles will end effective 1 June.

“This decision was made because the government is concerned for the people’s welfare. But at the same time, the government will continue studying subsidy rationalisation as a whole following the increase of fuel and gas prices in the global market,” Ismail Sabri told reporters today.

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It’s all going according to plan, as announced last year, for B5, which is a blend of 95% regular petroleum-based diesel and 5% palm oil-based biodiesel. The minister told reporters last Fri that the programme will be introduced in stages, starting from Putrajaya, before its full implementation at all petrol stations nationwide.

He added that B5 blend’s price mechanism will be regulated and determined by the Finance Ministry. “The price will not burden the people and the Government will ensure that it will be affordable to everyone,” he was quoted as saying.

The introduction, of course, follows on the recent announcement that the super subsidy on regular diesel is to be removed, meaning everyone – including those running commercial vehicles – will have to pay the same RM1.80 per litre for regular diesel.

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If your business falls under these 9 categories, you’ve probably been enjoying super cheap diesel thanks to your subsidy fleet card – prime movers, general cargo movers, Luton box vans, vans, rigid lorries for bottled beverages, rigid tanker lorries for flour transport, rigid lorries for refrigerated goods, water tankers and limousine taxis.

I know for a fact that these subsidy cards can be abused and are being abused as I know someone who enjoys fueling his pickup truck with super-subsidised diesel thanks to a card that he got from a relative who runs a business that qualifies for the subsidies.

But when even RON95 and RON97 price hikes can affect the prices of goods and services that the everyday rakyat consume, what more a hike in the price of diesel fuel that’s used by these lorries that run everyday and perform services that are essential to the economy?

That’s exactly what the government is going to do – it announced earlier this week that it will be removing this super subsidy, which means everyone will have to pay the same RM1.80 per litre of diesel. That’s about a 20% hike in fuel costs, and the government will supposedly save RM659.3 million in 2011 alone from this action.

I wonder what’s the real situation with the government coffers right now as I consider this to be sort of an extreme measure relative to any previous subsidy cutting. The government has in the short term only resorted to removing subsidies for RON97, a so-called “luxury” fuel, and have promised to only revise the “everyday man” RON95 fuel every six months. They rarely touch diesel as diesel practically runs the country’s logistics.

Other than the fact that this might and most definitely will increases the prices of certain goods and services, there’s also the danger of lorries resorting to overloading to be so-called “more efficient” per trip. It’s not like they don’t already do that.

Read more at TMI.

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Ismail Sabri added that according to Pemandu’s subsidy rationalisation plan, there would be a revision every six months for subsidies on all products, saying that diesel, LPG and RON95 prices were revised last December and therefore a revision was now due.

“This means that a mid-year revision will be carried out this month or early June. I can’t say what will happen, but the revision will take place and the government’s subsidy burden is high,” he told reporters, who posed the question about the status of RON 95 pricing following the increase of RON 97 recently to RM2.90.

He said that although he had previously stated that petrol prices would not go up at the moment, that wasn’t a guarantee that petrol prices would stay the same forever, since the government was already burdened with subsidies for petroleum products.

“Last year, the government’s subsidy for petroleum products was RM8bil when world fuel prices shot up, and we don’t see signs that it will drop. If this continues, the government will bear RM18bil in subsidies this year, an increase of RM10bil,” he stated, adding that if subsidies were reduced, the RM10bil could be used to build more schools, housing projects, educational aid and village roads.

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Not today, but we should brace ourselves for one. Deputy Prime Minister Tan Sri Muhyiddin Yassin told reporters this morning that the subsidy bill is set to double to RM20.58 billion, and that the country will not be able to sustain this level of subsidy at today’s prices. Of this total, petroleum related sectors, including subsidy for RON 95 petrol and diesel, takes the lion’s share of RM18 billion. Last year, it cost RM9.2 billion.

“Yes, we are subsidising but we cannot sustain subsidies on the same amount. So there are ways in which we are trying to reduce subsidy costs like the increase in price of sugar. We are doing it in stages. Subsidy costs has also doubled from RM10.32 billion in 2010 to an expected cost of RM20.58 billion in 2011. RM18 billion is subsidy for petroleum-related sectors,” he told newsmen.

“We cannot guarantee there will be no increase in the prices of goods. We cannot control the prices but where the government can intervene to decrease public burden then we will,” the DPM added.

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If this trend continues, the price of RON97 would probably hit over RM3.00 per litre by the end of the year. This is the fifth monthly increase in a row since December last year. The margin of increase has also been going up, with the first three hikes being only 10 sen, with subsequent increases being 20 sen.

RON95 and diesel remains unchanged for now.

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This makes it the fourth increase in four months for RON97, which has its price determined by a market float, with the jump to RM2.30 on December 1 last year followed by a 10 sen increase to RM2.40 per litre on January 5 and another 10 sen to RM2.50 on February 1.

The report in The Malaysian Insider quotes that an industry source said that the confirmation notice was sent out this evening about the 20 sen rise. No surprise with the hike happening, given that the price of crude oil has rocketed of late.

Update: It’s confirmed that the pricing of RON95 will remain unchanged at RM1.90 per litre – RON95 and diesel were last hiked on December 4 last year.

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I did not know it would be so soon, as after I read the PDAM president quote this morning, newspieces by the online editions of major dailies started appearing in the evening saying RON97 could be hiked by 10 sen at midnight tonight, bringing it up to RM2.50 per litre. RON97 was last hiked in early January 2011 by 10 sen to RM2.40 per litre, and before that the last hike was on the 1st of December 2010, also by 10 sen. If this 10 sen per month trend continues, we could be at RM3 per litre by the middle of the year.

Interestingly, from the graph above crude oil prices today seem to be a little lower than it was during the last hike. And this WSJ story says: “Crude oil futures were steady Monday as unrest in Egypt showed no signs of easing and attention turned to operations at the Suez Canal, a key world energy hub.”

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Last we heard, Euro 4M was supposed to be implemented this year, but in reality the phrase “implemented” doesn’t necessarily mean we’re going to be fueling our 320d and Focus TDCI at the pump with much cleaner diesel this year.

According to a Platts newspiece last week quoting a Malaysian government official, a draft proposal for Euro 4M compliant petrol and diesel is expected to be ready for cabinet approval by Q2 2011, following a discussion in November last year on what exactly Euro 4M specifications should be.

You may be wondering what the M in Euro 4M or even the current Euro 2M standards mean. There’s no official definition that I can find on what exactly the letter M stands for but what we know for sure is that Euro 2M and Euro 4M are localized versions of the Euro 2 and Euro 4 specifications. The specifications are definitely not 100% the same. I’m sure all of us are wondering what this implies.

You see the 320d everywhere these days – BMW has done well with diesel advocacy

Sometime last year, we attended a technical briefing by Caltex on their Techron fuel and a Chevron Senior Product Engineering Specialist was there – Mr Greg Engeler. According to Mr Engeler, every country in this region with the exception of Hong Kong has modified the specifications of the Euro spec fuel they are selling in their countries.

Malaysian climate, temperature and environment is different from Europe, so if Euro specifications are followed to the dot, it would be a waste of money refining the fuel to those specs. Instead, what the policymakers have done here in consultation with the fuel companies is pick and choose certain ‘enablers’ from the full Euro specs, such as sulphur content. According to Mr Engeler, it made sense for Hong Kong to just use Euro spec fuel as they do not have any refineries. This fact has helped Hong Kong be the first country in Asia to introduce ultra low sulphur diesel with 50ppm of sulphur content back in 2000.

But still, the Platts story has some other facts – allegedly the oil industry has proposed a 3.5% limit (down from the current 5%) for benzene content in petrol for the new standard, despite Euro specs calling for 1% benzene content since Euro 3. It seems that refining petrol down to 1% maximum benzene content is too costly. Benzene is also an anti-knock agent and it would be easier for the oil companies to engineer the petrol to have a good octane rating with the help of more benzene content instead of other methods and ingredients.

The Euro 2M diesel has brought awesome cars like the Ford Focus TDCI into Malaysia!

The Platts report also alleges that the proposed Euro 4M standards are silent on other specs such as aromatics and olefins for petrol and cetane number for diesel. Apparently the Euro 4M standard was proposed by Malaysia’s Department of Environment under the Ministry of Natural Resources and Environment, and defining those figures fall outside the jurisdiction of the department. Who sets the remaining specifications?

But this may not be a cause for concern at all as the same story says the government intends 100% for Euro 4M to approach a similar quality to Euro 4 fuels. The all important “sulphur content” enabler in the proposed Euro 4M standards has been specified to be 50ppm in both petrol and diesel, which is in line with Euro 4 standards. The current Euro 2M standards call for 500ppm, the same as Euro 2. Euro 5 has brought the limit even lower to 10ppm.

If and when Euro 4M is officially announced possibly by the end of this year, the oil companies will be given a 5 year grace period to implement the new fuel at the pumps, as apparently they can only start work on the refineries once the government has announced something solid. If this is the case, who knows when the first Euro 4M fuels will appear at the pump. It could take up to until 2012/2013 or up to 2016, worst case scenario!

Something else that we – or rather diesel vehicle owners – will have to watch out for is the introduction of B5 biodiesel mix at the pumps. B5 is essentially 95% regular diesel and 5% palm oil biodiesel. Last we heard from Caltex, the date for this implementation is June 2011. According to Caltex’s Mr Engeler, all diesel engines should theoretically be able to run B5 without issues. It’s only the higher biodiesel mixes which need reengineering.

Fuel economy such as this is no drama for turbodiesels even in a large sedan like a Merc E-Class – with the introduction of better diesel, hopefully more Malaysians will embrace cars like the Ford Focus TDCI and the BMW 320d/520d/730Ld

Biodiesel also tends to wax and thicken in cold climates but none of that is a problem in Malaysia. He did say that in reality, B0 (pure diesel) produces less NOX emissions compared to B5 although other types of emissions are typically lower, and B5 also tends to foam more. B5 also technically has less energy content compared to pure diesel but I don’t think the difference is one that is very noticeable.

In Malaysia, Sime Darby plantation have already started using their own blend of biodiesel called Bio-N (pronounced “Beyond”) in their upstream operation vehicles since March 2008. Bio-N started off as B5 but in some locations, Sime Darby are using blends of up to B10, which uses 10% palm biodiesel. In total, Sime Darby uses about 100 metric tons of pure biodiesel every year to blend with regular diesel into Bio-N for its upstream vehicles.

If you look after the jump, you’ll find an embedded PDF document released by the government of Australia on its position on biodiesel blends such as B5 up to even B20, which is generally the accepted limit before diesel engines and fuel systems start to get wonky. It’s a very good read.

Source

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Along with RON97, kerosene is also up by 10 sen to RM2.50 per litre. The good news is that the pricing for RON95 and diesel remain unchanged, even though both were increased recently a month ago, on December 3.

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The last time RON97′s price was hiked, it was just about a month ago on the 2nd of November 2010. The hike back then was smaller – just 5 sen from RM2.10 per litre to RM2.15 per litre.

RON95 and diesel remains the same price of RM1.85 per litre and RM1.75 per litre respectively.

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Source

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Word is that this is just the first in a round of many more subsidy cuts to come, which means the government has implemented some kind of incremental subsidy reduction plan similar to Idris Jala’s proposed PEMANDU plan.

• RON95 petrol price will increase by RM0.05 to RM1.85.
• RON97 petrol will be put on a ‘controlled float’. I’m not sure what the price will be after midnight. Will it be up by RM0.05 to RM2.10 per litre or will it go up by a larger margin?
• Diesel will go up by RM0.05 as well, which means the diesel price that you and me will be able to get at the pump will be RM1.75 per litre. However the government also says the RM0.05 hike is for all sectors so fishermen and etc will feel the hike as well.
• LPG Natural Gas will go up by RM0.10 to RM1.85 per kg.
• Sugar will go up by RM0.25 per kg to RM1.75.

Seriously guys, based on an average full tank of 50 litres, you’re only going to save RM2.50 if you rush to the pumps to fill your motor vehicle up today. It’s not worth it, please don’t clog up the fuel pumps and the roads around the pumps and make the roads a living hell for less calculative motorists!

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Just as a recap, here is Idris Jala’s proposed plan to cut down on fuel subsidies in Malaysia as part of the PEMANDU think tank project:

• Current 2010 Price – RM1.80 per litre RON95
• Q3/Q4 2010 Price Hike – RM1.95 per litre RON95
• 2011 Price Hike – RM2.16 per litre RON95 (broken into 2 hikes, once per 6 months)
• 2012 Price Hike – RM2.20 per litre RON95
• 2013 Price Hike – RM2.34 per litre RON95
• 2014 Price Hike – RM2.52 per litre RON95
• 2015 Price Hike – RM2.60 per litre RON95

Stay tuned for more updates!

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This is the petrol price hike schedule which we’ll be looking at, based on a crude oil forecast of US$73.06 per barrel in 2011 and the region of between US$79.41 to US$94.52 per barrel between 2013 and 2015.

• Current 2010 Price – RM1.80 per litre RON95
• Q3/Q4 2010 Price Hike – RM1.95 per litre RON95
• 2011 Price Hike – RM2.16 per litre RON95 (broken into 2 hikes, once per 6 months)
• 2012 Price Hike – RM2.20 per litre RON95
• 2013 Price Hike – RM2.34 per litre RON95
• 2014 Price Hike – RM2.52 per litre RON95
• 2015 Price Hike – RM2.60 per litre RON95

These are just the proposed hikes for RON95. RON97 was not mentioned in the recommendations, which indicates that the government is further decreasing priority on RON97 subsidies. We could see a price of way over RM3 per litre for RON97 by 2015.

Not only that, the proposal recommends that the government renegotiate the PLUS toll concession contract this year and the LDP contract by 2013, then all toll concession agreements must proceed without any subsidies, resulting in a toll hike of between 10% to 67% depending on the highway, distance, etc from this year onwards.

For those dreaming of a future of driving electric cars, electricity tariffs are to be untouched for those using less than 200 kWh for this year. However gas prices are proposed to be increased by RM3/MMBTU every 6 months, which will translate to an electricity increased of 1.6 sen/kWh every 6 months. If we take the Nissan Leaf’s 24kWh battery as an example, that’s a RM0.38 hike per full charge for the Nissan Leaf every 6 months. LPG, which is priced at RM24.50 has been proposed to be hiked to RM27 with a 20% price increase every year.

The proposal also spells out a “mitigation plan” which involves giving cash rebates of 126 ringgit for owners of cars with engines smaller than 1,000cc in capacity, and 54 ringgit for owners of small motorcycles. My reference source doesn’t mention of this is one time, monthly, or yearly. There is also a proposal for a 20% discount on toll charges for frequent users and a cash rebate of RM20 for anyone with a Malaysian IC – not sure what this cash rebate is for but I’m assuming it’s for fuel?

According to PEMANDU this will save the government about 3 billion ringgit this year, 14 billion ringgit next year, 21 billion ringgit in 2012, 29.5 billion ringgit in 2013 and 35 billion ringgit in 2014. These plans are yet to be approved by the government.

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The highest fuel price we’ve had to endure so far has been RM2.70 per litre for RON97 fuel and RM3.15 per litre for Shell V-Power. This was between the 5th of June 2008 to the 23rd of August 2008. However, there was also a RM625 fixed fuel subsidy issued through Pos Malaysia during that period. You could claim the money when you renewed your road tax. Petrol prices remained high throughout most of the second half of 2008 but was slowly reduced during that period until it settled down to the current prices of under RM2 per litre in December 2008.

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It must have been very recent as just less than a week ago, the Domestic Trade Minister said he would be revealing the system’s details in March and that we would be very happy about it – perhaps what he means it that it was scrapped in favor for a simpler system!

But according to the report we still might see a small price hike of 10 sen before the first half of this year. The current price structure of RM1.80 per litre for RON95 and RM2.05 per litre for RON97 was introduced on the 1st of September 2009 and at that time crude oil was US$72.75 a barrel. Crude oil now goes for US$79.11 per barrel – which represents about an 8% hike. It had previously breached US$84 per barrel in January. A proportionate 8% hike in RON95 prices would be about 15 sen – so a hike of 10 sen would be actually less than the 8% hike in crude oil prices.

The thing is, I’m not sure if we have more time now or if there is another simpler and more cost effective subsidy system in the works to be implemented by May 1st. OR worse case scenario, the government reverses its decision again and decides to go ahead with the tiered system. Unless something comes out from the relevant ministry of the Prime Minister’s Office, we’re never going to know for sure. Seriously – it seems that most of the time we just don’t know for sure whenever it comes to policies. Either way, it would still be wise to take a look at our fuel expenditure and the kind of vehicles we use to ones that are more efficient and frugal.

We should be prepared for the day when the government eventually pulls the plug on subsidies here in Malaysia. Hopefully by then the economy would have progressed to a point where we can actually afford the unsubsidized prices without issues.

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This story originally appeared on Paul Tan's Automotive News on Sun, 27 May 12 13:17:33 +0000.

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The amount of litres to be given is said to be between 200 to 300 litres per vehicle and if you have multiple vehicles, you will only get 1 car’s worth of subsidised fuel. I think it would be interesting to set up a poll and see how much of fuel you use every month.

I easily refill my car about 6 to 7 times a month or more because I travel alot, and each refill is about 65 litres. That would peg my usage at about 400 to 450 litres per month, which means if I qualify for the full 300 litres of subsidy (hypothetically), I would have to pay the full price for my remaining 150 litres of fuel.

Assuming a subsidy of 50 sen per litre – that’s about RM75 extra a month. But then of course, since there is word that engine capacity is going to be taken into consideration, even though my daily driver’s engine capacity is of less than 2,000cc, because I own an old E30 with a 2.5 litre engine that I want to restore, I will probably not qualify for any subsidies.

What’s your story? Share your petrol/diesel consumption pattern with all of us here, and perhaps with luck some relevant people in the ministry can observe your comments and it can be taken into consideration. Let’s try to be constructive as well as keep to the topic for this particular post’s comments.

So – how much fuel in terms of litres do you consume a month? Do you expect that you’ll qualify for subsidies? Vote in the poll below and share your story in the comments section.

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Although most of us dread the thought of having to pay more for fuel soon (and with more hassle as well), at least now we will have a one to two month head start to planning our finances instead of only knowing at the very last minute.

Datuk Seri Ismail declined to provide any details (in an interview with NST), but he did say that it would make people happy. I am hoping that this could indicate a fair system that would not trouble the low to middle class income earners. Let’s hope the government has not been out of touch with the reality of things on the streets in formulating this new subsidy system, otherwise it will indeed be a bitter year of the tiger for us.

What we know so far is that foreigners (even those who consider Malaysia their home and work here with local and not typical expat level of salary) would definitely not get any subsidies because they will not hold the MyKad, which is said to be a key element in how the system works. Your MyKad will identify you (a newspaper report has even cited you need a thumbprint scan like at the airport with your passport or with your MyKad at the bank) and how much of subsidies you are eligible to get.

The system is said to be managed by Maybank, the first time this has been revealed in the newspapers, though I’ve heard rumors of this for months. A pilot project to test out the system will go live sometime in end March or perhaps April – a rather short test time for a large scale nationwide roll-out of a new system!

You could get between 200 to 300 litres of subsidies per month depending on various factors such as socio-economic and the dreaded engine capacity factor. The threshold is said to be 2,000cc – and I would be able to get pass this number if not for the 2.5 litre old E30 which I purchased for just over RM10k recently. This probably means zero subsidy for me. Company cars are said to be not eligible for the subsidy. Once you run out of subsidised litres per month, you will have to pay full price, which is expected to be RM2.10 per litre for RON95.

Even for those who qualify for the litre amount of subsidies that they need every month, they will not likely to continue paying the RM1.80 per litre for RON95 and RM2.05 per litre for RON97 we are paying right now. Sin Chew Daily reports that the government is expected to announce a new subsidized price of RM1.90 per litre for RON95 and RM1.80 per litre for Euro 2M diesel. Nothing was said about RON97, so that can either be a very good thing or a very bad thing! But I have a feeling there will not be any ‘subsidised’ option for RON97. If unsubsidised RON95 is RM2.10 per litre, unsubsidised RON97 might touch RM2.50 per litre!

Whatever it is, we’ll know the full details next month, if the minister keeps true to his word, and hopefully we’ll be happy. The March announcement date may coincide with a ‘registration exercise’ as mentioned in newspaper reports previously.

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• Some kind of ‘registration exercise’ will begin in March in preparation for the new system’s implementation on the 1st of May. Maybe the government has changed their mind and will reveal our new nightmare two months ahead instead of the night before?
• Someone who owns multiple cars will only be eligible for subsidy worth for one car only.
• Someone who does not own a car does not get any subsidy quota. This combined with the point above means that if you have a few cars registered under your name but used by someone else (your kids for example) you should probably quickly change ownership of your cars to their designated drivers.
• If a car owner finishes his monthly subsidy quota, the person can continue to purchase fuel, but at unsubsidised market rates.
• Quota is expected to be anything between 100 to 300 litres per month.
• The government is considering removing the engine capacity variable from the formula that determines your monthly subsidy.

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According to Domestic Trade and Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob in an interview with The Star, there are many people who have to use 4WD vehicles with large engines in East Malaysia because of the terrain so the new fuel pricing mechanism will only come into place later.

From the interview, the matter of factoring in engine capacity in subsidy entitlement considerations sounds like a done deal, with the only thing left to be decided is what is the threshold of engine capacity before you go up a ‘price bracket’. The Minister also revealed that each person who owns a car will only get a subsidy (both in terms of price and litre quantity sense) for one car only, so if you are a parent and have a few cars in your household under your name for each of your kids you may want to start transferring the ownership to the actual user of the car.

Interestingly, the Minister also revealed that the government has no plans to touch the diesel subsidy for the moment. But he did say that the ‘market price’ for our Euro 2M diesel right now is RM2.09 per litre. If you’re shopping in the premium executive car segment, it might be a good idea to go for either the 320d, the 520d and the 730Ld now depending on how deep your pockets are.

For the rest of us who can only afford (relatively) everyday joe cars, there’s a new Ford Focus TDCi coming very soon so that might be a good idea as well.

Read the full interview: Still in dark over system

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While we have no details yet as of now on what the threshold of an increase petrol price will be but past government measures might give us a hint. When the price of petrol hit the roof back in 2008, the government announced that a RM625 one-time petrol subsidy would be given to cars with engine displacements of up to 2,000cc, trucks with engine displacements of up to 2,500cc and bikes of engine sizes up to 250cc. We might see these numbers used again for the new subsidy system.

Cars with large engines are already being ‘punished’ with exponentially higher road tax charges but now owners of such cars will have to deal with the fuel prices as well.

Make no mistake about it – with the trend of how things are going, the middle class are just going to be squeezed tighter and tighter. We’ve got to deal with pricier petrol, GST, and many others. You had better plan your finances and monthly budgets for the worse this year, as I don’t think we are going to get any indication of what we are going to face until the last minute. The same report unveiled that details would only be announced on the very day of implementation.

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© 2012 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 27 May 12 13:17:33 +0000.

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