According to Deputy Finance Minister Datuk Chor Chee Heung, the new fuel subsidy management system will be implemented from May 2010 onwards, so I suggest everyone be prepared to restructure your household’s monthly budgets for a potential increase in fuel expenditure, especially if you are a middle income earner, a group that like its namesake are constantly squeezed around the world.

The system is currently being finetuned and studies on the subsidy distribution and target groups are currently still underway. The system’s exact mechanism will be announced after the study is completed and a decision has been made.

The PM had previously announce in his Budget 2010 speech that the system would use our MyKad identification card.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

• Produce cleaner fuel injectors with 47% more flow resulting in 6% more power.  In a diesel engine, keeping the fuel injectors clean is critical as diesel fuel injectors are prone to deposits clogging.  Deposits can upset the injector spray pattern and hinder the fuel-air mixing process and this can result in decreased fuel economy, increased emissions and compromise engine performance. In the very latest engines, each hole in a fuel injector may be as small as the width of two human hairs. The potential for negative impact from injector deposits is increasing as diesel engines become more sophisticated.
• Protect metal surfaces against corrosion.
• Produce 83% less foam, making it easier for the diesel to be filled.

The above benefits were measured in a lab test compared to a “reference diesel” without the Techron D additive. Has anyone with a diesel vehicle tried Caltex Diesel yet, or any of the new Euro 2M diesels? How do you find it compared to the old MS123 diesel on sale before the 1st of September?

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

It’s just been a month since Shell was supposed to have officially rolled out their new RON95 fuel, but now they’ve decided to introduce an updated formula.

Their fuel is now called Shell FuelSave Unleaded 95 and Shell FuelSave Unleaded 97, and Shell claims it can help motorists save up to 1 liter from every full tank – with a full tank calculated as 50 liters of course.

Savings of 1 liter out of 50 liters can be said a few ways to better help understand it. It can either be a 5% fuel saving, or an extra 10 to 12km depending on how much fuel your engine normally drinks, or RM1.80 per tank.

Shell claims the new formula contains an ingredient that is active in your engine from the moment you start using it, not just after one full tank. It’s called and Efficiency Improver and it’s designed to help lubricate engine parts where normal engine oils cannot easily reach, as the fuel comes in from the top and naturally engine oil has to fight against gravity.

I personally have not tried the fuel yet but if you decide to give it a shot please share your experiences here. I’ve actually seen the promo posters for this before the launch today so you could already have this new formula in your fuel tank if you’ve pumped a full tank in the past 2 or 3 days.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

A Diesel Performance Additive Package from a leading chemical company is used to give infiniti Diesel anti-corrosion (for engine protection) and foam inhibitor (for easy fill-up) properties as well as improve mileage. The additive also contains a key detergent ingredient called HR-PIB or Highly Reactive Polyisobutene Succinimide which can clean deposits in the engine.

This additive package has been added to the fuel at the chemical company’s recommended maximum dose rate, which offers double the cleaning power against typical surveyed European branded diesel. This was the findings of tests on the 1.9 liter Peugeot XUD9 diesel engine, which is apparently a standard European test.

infiniti Diesel goes for the standard price of RM1.70 per liter.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Caltex officially launched their Premium 95 fuel with Techron late last month at the Caltex station in Sunway. RON95 is now available at Caltex stations nationwide. The new fuel will replace the Caltex Silver with Techron which is a RON92 fuel, and the Caltex Gold with Techron fuel will be renamed Premium 97 with Techron.

Some of you actually had some questions in the blog comments of the previous story on Caltex Techron, such as whether the local Techron formula is the same as the Techron fuel in the USA sold by Chevron. Here are some answers from Caltex:

1. Is there any difference between Techron in Premium 95 and in your RON97 fuel?

The Techron ingredient in 92, 95 or 97 is the same and gives the same level of performance in each grade.

2. Is the Techron formula for our market the same as the one used overseas in countries like the US, etc?

Yes, it’s the same formula and level of performance that was the first to be recognized as “Top Tier” by Honda, GM, Toyota, BMW, Audi and Volkswagen.

3. What properties does the Techron additive have?

Techron has been designed to provide fast & effective cleanup of the engine intake system (manifold, ports & valves) as well as the fuel metering system (fuel injectors or carburetor) and to keep those critical parts clean. It is able to clean up port fuel injectors in ONE tank.

4. I understand polyetheramine is one of the ingredients in Techron. What is polyetheramine?

Polyetheramine (PEA) is one of the main detergents in Techron. It’s designed to control intake valve deposits, port deposits and fuel metering deposits to maintain smooth engine operation, power & exhaust emissions. It accomplishes this without significantly contributing to combustion chamber deposits (CCD) unlike most other fuel additives. Low CCD helps minimize octane requirement increase which can reduce power in some vehicles equipped with knock sensors. PEA also eliminates any possibility of harm in the crankcase.

5. Any other tips on how to keep your engine clean? Is it true that once in a while you have to drive your car a little harder than usual to clean off those deposits?

Always use gasoline that contains a powerful detergent with high efficacy, like Techron, on a continuous basis. The second statement is a myth.

6. Since RON97 has been repositioned as a premium unsubsidised fuel by the government, is Caltex going to upgrade their RON97 fuel to something performance-based like V-Power?

There’s always this possibility and it greatly depends on customers’ requirements and demands.

Premium 95 with Techron had actually made its debut at the Caltex Bandar Utama station on the 5th of August 2009. It is now available at 40 Caltex stations nationwide.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Well, it’s been a few days now since the government have officially restructured the price and grade structure of our fuel. RON95 now costs RM1.80, the same price as RON97 before anyone attempted to ‘fix’ the system, while RON97 is now RM2.05.

For those of you who still want to continue pumping RON97 if your car requires the higher octane, are you having luck finding the fuel where you stay or work?

In my neighbourhood, there are only Petronas stations and one lone Shell whose fuel pumps are really slow. So to save time, I usually pump Petronas as the station gets the fuel into my tank faster. Unfortunately, RON97 sale at my station seems to have halted for the time being.

This is just speculation at the moment (though there have been some whispers that there is truth to this), but hopefully that the temporary halt of RON97 sales means a new and better fuel is coming on the way for Petronas to take the place of Primax 3. But for now, let’s share our experiences pumping RON95 in our car.

What car are you using, and which RON95 did you pump? Have you noticed any changes to the way your car drives and how your engine bay sounds? And if yes, have the changes you’ve experienced been positive or negative so far? For those who experience better or worse fuel economy, please share what are the differences in terms of km per liter or liter per 100km, whichever you are more comfortable with.

Sometimes if your car does not have high octane requirements, switching from a RON97 fuel with an inferior additive mix to a RON95 fuel with a superior additive mix may have a positive effect. Of course you need not remind that in the first place we were supposed to have a positive effect on our wallet but no longer as the new RON95 is the same price as the old RON97.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Read after the jump to check out the survey results as well as the results of the product test. Of course some of the questions called for an open-ended answer and it’s not feasible to include the thousands of replies here so we only hav the initial multiple-choice questions as well as the results of the product test.

Click icon on the top right of document below for enlarged view

Click icon on the top right of document below for enlarged view

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

As for RON97, we already know that a price hike is imminent – it will be priced at RM2.05 per liter. RON92 has been phased out. No news about Shell V-Power for now, as it is it’s been removed from a significant amount of stations. They are probably still trying to figure out the sweet spot for pricing and planning the logistics for supply to stations.

This is expected really, considering crude oil per barrel closed US$72.75 a barrel on Friday, which is up 20% from around US$60 in July. There are various factors for this but the most quoted reasons are an improving global economy and a declining US dollar – the lower USD’s values are, the more USD you will have to pay per barrel.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

According to Shell, the official reason for phasing out V-Power Racing for some stations is they need to optimize selected stations in their network and increase capacity for RON95 to meet customer demand. V-Power Racing was never available at all stations in the first place – the Taman Connaught Shell that used to be a Projet had always had RON92 and RON97.

Anyway I found this list of stations where it is still offered on their site. Click the icon at the top right of the document viewer to read the tables in a larger view.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Euro 2M diesel is now here in Malaysia ahead of the 1st September 2009 schedule. It is priced at RM1.70 per liter. You will be able to find it at all Petronas stations from the 1st onwards in the form of the new Petronas Dynamic Diesel, that’s sold with an additive Petronas calls SINAR D07. Petronas says the previous additive introduced in 2006 was known as SINAR D05.

The new Petronas Dynamic Diesel meets Euro 2M standards, which means a maximum of 500ppm of sulphur in the fuel. This is a huge improvement over the previous standard which limited sulphur content to 3000ppm. But don’t think all diesels were that high in sulphur all this while – a research by Petronas which I pointed to back in 2007 showed that out of 6 brands of diesel at that time (2004), only one had 2800 ppm of sulphur, with the rest ranging from as low as 200 ppm to 500 ppm.

The availability of Euro 2M diesel fuel may spark an interest in both the car manufacturers and consumers to offer diesel versions of passenger cars and buy these diesel-powered products respectively. However one problem would be the fact that most modern diesel engines are designed to run on Euro 3 (350ppm), so the new Euro 2 diesel may still not be good enough. Euro 4 requires 50ppm, and Singaporean diesel such as Shell ULSD is already compliant.

Companies that are confident of a big enough volume might be willing to do some modifications to suit our market and it is very likely that this will only happen at the more expensive segments where the margins are larger and easier to justify. For cheaper cars, consumers may not be confident enough in diesel cars and most may still shy away from the benefits of a turbodiesel because of the certain negative characteristics of a diesel engine such as the sound and smell.

The worst part is that even for those who are very eager to try diesel cars for the economy it offers, the norm is for diesel powerplants to cost more than a petrol engine, so this may drive up the prices of diesel-engined models to a level too shocking for the budget-conscious consumers at that level to accept.

The BMW 320d Touring was offered here by BMW Malaysia Sdn Bhd when the E90/E91 3-Series was first launched. This model is now gone when the facelift was introduced as response was low.

In the second hand car market, the new diesel may spark a new interest in second hand diesel-powered luxury cars cars such as the Mercedes-Benz E270 CDi or the BMW 530d as a powerful and fuel efficient alternative. The E270 CDI can be found priced at a good 15% to 20% cheaper than its petrol-powered siblings of the same year and the massive low-end torque of a turbodiesel suits the kind of relaxed drive that an E-Class buyer typically looks for.

We will see more fuel companies launching their improved Euro 2 diesels over the next few days leading up to the 1st September 2009 deadline for the new standard to be introduced. The fuel companies will definitely take this opportunity to rebrand their fuels.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Chevron, the company which operates Caltex stations here in Malaysia, has released some information to help consumers with the upcoming switch to a RON95 and RON97 fuel offering at the pumps from the present RON92 and RON97 offering.

The government plans to hike up the price of RON97, and price the new RON95 between current RON92 and RON97 prices. We’ve talked about RON95 and octane before a few times in the past, but here’s some from the horse’s mouth.

The presentation deck is actually quite interesting as it explain the differences between RON, MON, octane satisfaction requirement survey results in countries that offer a wider range of fuel octanes on sale compared to Malaysia, and other interesting bits such as the percentage of sales of each octane grade in various other countries.

Click the image above to view a presentation about RON and fuels in general (use the prev and next buttons to cycle through the slides), or look after the jump for a FAQ as well as thumbnails of all the slides.

RON: Frequently Asked Questions

1. What is RON?

Apakah RON?

RON (Research Octane Number) is a rating of petrol. It determines a petrol’s ‘anti-knock’ quality or resistance to pre-ignition or detonation as it burns in the combustion chamber. Knocking is an abnormal combustion and should be prevented as it is damaging to the engine.

RON (Research Octane Number atau Nombor Oktana) adalah satu kadar petrol. Ia menentukan kualiti mengurangkan ketukan enjin (anti-knock) atau rintangan terhadap pra-nyalaan atau peledakan semasa bahan petrol terbakar di kebuk pembakaran. Ketukan adalah satu aktiviti pembakaran yang luar biasa dan sepatutnya dicegah kerana merosakkan enjin.

2. What petrol is sold in Malaysia currently?

Apakah petrol yang dijual di Malaysia pada masa kini?

Service stations in Malaysia currently retail petrol products of RON92 (Silver with Techron at Caltex) and RON97 (Gold with Techron at Caltex). At the moment, vehicles requiring RON95 and below are also utilizing RON97.

Stesen-stesen di Malaysia kini menjual produk petrol RON92 (Silver with Techron di Caltex) dan RON97 (Gold with Techron di Caltex). Pada ketika ini, kenderaan yang memerlukan produk RON95 dan ke bawah juga menggunakan produk RON97.

3. What vehicle types are able to use RON95?

Apakah jenis-jenis kenderaan yang boleh menggunakan petrol RON95?

Most vehicles are able to use RON95. However, it’s best to refer to the Original Equipment Manufacturer’s (OEM) recommendation in your car manual or check the back of the petrol filler lid of your car for the recommended octane rating.

Kebanyakan kenderaan boleh menggunakan RON95. Walau bagaimanapun, pengguna perlu merujuk kepada nasihat Pengilang Kelengkapan Asal (OEM) yang tertera di buku panduan kenderaan atau semak pada belakang penutup tangki gas untuk kadar oktana yang disyorkan.

4. (i) I am a RON92 consumer. Won’t switching to RON95 damage my vehicle’s engine?

Sebelum ini, saya adalah pengguna petrol RON92, adakah pertukaran kepada RON95 tidak akan merosakkan enjin kenderaan saya?

The main difference between RON92 and RON95 is their octane ratings, indicated by the number in the product name.

Using petrol of a higher RON will not hurt your car. You just need to find a suitable fit for your car and driving style. It’s best to refer to the Original Equipment Manufacturer’s (OEM) recommendation in your car manual or check the back of the petrol filler lid of your car for the recommended octane rating.

Perbezaan ketara antara produk RON92 dan RON95 adalah kadar oktana masing-masing, seperti yang ditunjukkan pada nama produk.

Menggunakan petrol dengan kadar RON yang lebih tinggi tidak akan memudaratkan kenderaan anda. Anda hanya perlu mengenal pasti RON yang sesuai untuk kenderaan dan cara pemanduan anda. Walau bagaimanapun, pengguna perlu merujuk kepada nasihat Pengilang Kelengkapan Asal (OEM) yang tertera di buku panduan kenderaan atau semak pada belakang penutup tangki gas untuk kadar oktana yang disyorkan.

(ii) I am a RON97 consumer. Won’t switching to RON95 damage my vehicle’s engine?

Sebelum ini, saya adalah pengguna petrol RON97, adakah pertukaran kepada RON95 tidak akan merosakkan enjin kenderaan saya?

The main difference between RON97 and RON95 is their octane ratings, indicated by the number in the product name.

Using petrol of a lower RON may or may not hurt your car. You just need to find a suitable fit for your car and driving style. It’s best to refer to the Original Equipment Manufacturer’s (OEM) recommendation in your car manual or check the back of the petrol filler lid of your car for the recommended octane rating.

Perbezaan ketara antara produk RON97 dan RON95 adalah kadar oktana masing-masing, seperti yang ditunjukkan pada nama produk.

Menggunakan petrol dengan kadar RON yang lebih rendah tidak akan memudaratkan kenderaan anda. Anda hanya perlu mengenal pasti RON yang sesuai untuk kenderaan dan cara pemanduan anda. Walau bagaimanapun, pengguna perlu merujuk kepada nasihat Pengilang Kelengkapan Asal (OEM) yang tertera di buku panduan kenderaan atau semak pada belakang penutup tangki gas untuk kadar oktana yang disyorkan.

5. Should I empty my car’s petrol tank before refueling with RON95?

Adakah saya perlu mengosongkan tangki minyak kereta saya sebelum mengisi petrol RON95?

This depends on the amount of remaining petrol in the petrol tank. The smaller the amount, the faster you can derive the benefits of RON95.

Ini terpulang kepada amaun baki petrol di dalam tangki petrol anda. Semakin kurang bakinya, semakin cepat anda menikmati kelebihan RON95.

6. What is the effect on the performance of the engine if petrol of a different RON is mixed together?

Apakah kesan jika berlaku percampuran RON95 dengan RON97 atau RON92 ke atas prestasi enjin kenderaan?

It is not recommended to mix different RON levels as this might result in sub-optimal performance. For example, if you have added a lower-than-recommended RON in the mixture, this can result in knocking and can cause a loss of power.

Ianya tidak disyorkan untuk mencampur kadar RON yang berlainan kerana ia mungkin akan menyebabkan prestasi yang kurang memuaskan. Contohnya, jika anda telah menambah RON yang lebih rendah dari kadar yang disyorkan di dalam campuran tangki anda, ini boleh menyebabkan ketukan enjin serta kehilangan kuasa kenderaan.

7. What is the impact of RON95 usage on the environment?

Apakah kesan penggunaan RON95 kepada alam sekitar?

At present, there is insufficient data to adequately prove that a higher or lower RON grade poses an environmental issue.

Pada masa kini, masih tiada fakta sahih yang cukup untuk membuktikan kesan penggunaan kadar RON yang lebih tinggi atau rendah kepada alam sekitar.

8. Do I have to always pick the highest octane rating petrol for my vehicle?

Perlukah saya sentiasa memilih petrol dengan kadar oktana yang tertinggi untuk kenderaan saya?

The highest octane rating may not necessarily be the best for your car. You should choose a suitable fit for your car and driving style. It’s best to refer to the Original Equipment Manufacturer’s (OEM) recommendation in your car manual or check the back of the petrol filler lid of your car for the recommended octane rating.

Menggunakan petrol dengan kadar RON yang lebih tinggi tidak semestinya yang terbaik untuk kenderaan anda. Anda perlu mengenal pasti RON yang sesuai untuk kenderaan dan cara pemanduan anda. Walau bagaimanapun, pengguna perlu merujuk kepada nasihat Pengilang Kelengkapan Asal (OEM) yang tertera di buku panduan kenderaan atau semak pada belakang penutup tangki gas untuk kadar oktana yang disyorkan.

9. Does a higher RON indicate a more environmentally-friendly fuel product? How about greater power?

Adakah penggunaan kadar RON yang lebih tinggi menentukan produk petrol yang lebih mesra terhadap alam sekitar? Bagaimana dengan lebih kuasa?

The true difference between the grades of petrol lies in an engine’s requirement. This does not guarantee a promise of greater power or a more environmental option as the number increases. This infers that cars using RON products greater than their engine requirements may not be necessarily gaining better performance than if they adhered to their car Original Equipment Manufacturer’s (OEM) recommendations.

Perbezaan sebenar gred petrol tertakluk kepada keperluan enjin kereta masing-masing. Ini tidak menjamin kelebihan kuasa atau lebih mesra alam sekiranya nombor oktana meningkat. Ini bermaksud kenderaan yang menggunakan produk RON dengan kadar yang lebih tinggi daripada keperluan enjin masing-masing tidak semestinya menikmati prestasi yang lebih baik berbanding dengan menggunakan kadar RON yang disyorkan oleh Pengilang Kelengkapan Asal (OEM).

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

First of all I think it’s necessarily to clear some misconceptions between the levels of fuel grades available in Malaysia. First of all, all petrol sold at consumer pumps in Malaysia are unleaded. This includes the current RON92, and the upcoming RON95. There are only a few stations that sell RON92 in Malaysia due to low demand. Some petrol stations like Shell sell Shell Regular RON92 at some stations which are usually stations that used to be Projet stations in the past. These stations do not sell V-Power. Only some Petronas stations sell a “red” Prima 92 alongside their Primax 3 which is RON97. The problem is with the usage of a red instead of green colour for RON92 fuel, which leads consumers to believe RON92 is leaded fuel. Stations like BHPetrol and Caltex sell RON92 and RON97 consistently at every station.

Secondly, fuel octane does not necessarily represent fuel quality. All petrol come from the same if not similiar base supply. Most of the time it is the additive package that is mixed together with the fuel that determines whether fuel performs better than another. Shell Super and Shell V-Power Racing are both RON97, but V-Power Racing uses a different additive mix. Companies like BHPetrol and Caltex use identical additive packages for both their RON92 and RON97 products, and furthermore BHPetrol actually mixes 800ppm which is double the recommended amount of additives of 400ppm by their supplier into their fuel.

These additive packages can contain ingredients such as detergents to clean your engine, or friction modifiers to help reduce friction between the various engine components that are being flung around at such high speeds and temperatures.

What you need to do is find out whether your car can run on RON95 or not. This information should be available in your car’s manual or on a sticker near your fuel flap. I wrote to Proton and they claim that all Proton cars should be able to run fine on RON95 except some older carburetor cars, which need an ignition timing adjustment fix. You may want to contact your Proton service center to see if they can do this adjustment for you before you start to fill up with RON95. This is so that you can avoid any damage no matter how little or significant caused by knocking due to insufficient fuel octane.

And then of course there will be some of you who will decide to continue to use the more expensive RON97. In fact some companies which offer both a regular and premium RON97 product now may decide to discontinue the regular RON97. Which brings us to another matter…

I would like to request a favour from you dear readers – if you have the free time to answer a short survey consisting of less than 10 yes or no (including a few A or B) answers. It should not take you more than 3 minutes. The questions revolve around your thoughts on the type of fuel grades in Malaysia.

At the end of the survey you will also be asked if you would like to participate in a fuel product test, where selected respondents will be given a free tankful of a new fuel in exchange for your opinion on how the new fuel feels like. If you would like to help further, please also spread the word and let everyone know about the survey – the more data obtained, the most accurate the results will be. Thank you so much!

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

It’s not known yet at the moment what the new RON95 grade fuel (which replaces RON92 in the market) will be priced at, but when Datuk Shahrir was the minister he said that RON95 would be priced at the same price as RON92, with the income from RON97’s hiked price used to subsidise RON95 fuel.

Hopefully this is still the plan. Get ready for massive jams at the petrol stations on the last day of August!

UPDATE: RON95 fuel will be replacing RON92 and will be priced at RM1.75 per liter, which is up RM0.05 from RON92 prices. Although nationwide roll-out is only expected to be fully ready by September 1st 2009, the new RON95 grade fuel is already available at 2 Petronas stations in Putrajaya. In addition, there will not be any ceiling price for RON97 fuel so petrol companies can feel free to come up with premium versions such as Shell V-Power as long as they inform the government.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

“The UMNO election was always a good place for an assessment of ministers or elected officials. So it shows that in the delegates’ view, I have not done well enough. I accept their verdict,” says Datuk Shahrir. He did not succeed in being elected into the UMNO Supreme Council in the general assembly that is currently ongoing this week.

This isn’t intended to be a politics story of course. The point of writing this is that if his job really goes to someone else, there is a possibility that recent developments with our fuel such as the switch to a RON95 and RON97 system and Euro 2 diesel might change, if the new head honcho has his own ideas. Or it might just go on.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

This July deadline could have been pushed back as Datuk Shahrir Samad has now announced that RON95 fuel will be available from September 1st 2009 onwards, so changes to RON97 (if any) would also likely be pushed back to coincide with the date. You can’t have a two month period of having a higher priced RON97 but with no RON95 as an alternative can you? Datuk Shahrir also revealed that the higher grade Euro 2M diesel will be introduced on the same date to replace the current grade of diesel and will be priced the same as the outgoing fuel.

In related news, the RM625 cash rebate exercise that was supposed to end on the 31st this month has been extended to the 14th of April 2009 to give people who qualify but have not claimed their rebate yet time to claim it. Just a refresher – the rebate is for vehicles with engines 2,000cc and below, and for pickups and trucks with engines 2,500cc and below. Motorcycles 250cc and below are eligible to RM150.

There has been alot of news, flip flops and other announced “decisions” made leading up to this latest announcement, so please read the previous related posts linked below:

Related Posts:
RON97 will not be floated in July, but will be priced higher to make way for new RON95
What is RON (Research Octane Number)?
Cheaper RON95 fuel to be introduced mid-2009
APM: How fuel prices are calculated in Malaysia
Malaysian diesel to be Euro 2M grade in 2009

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

He told The Star that Singapore, Taiwan and Indonesia have been using RON95 grade fuel without any problems. The thing is, the difference between RON98 and RON95 in Singapore is less than S$0.10 at the moment. Dollar for dollar, that is a small difference, and people who find that they need RON98 can do so without causing much pain to their pockets. It sounds like in Malaysia the difference between RON97 and RON95 will be higher than the current 10 sen gap between RON97 and RON92.

I have actually written to him twice about how RON95 would sometimes be unsuitable for older high compression vehicles designed to run on RON95 as carbon deposits and other wear and tear would actually increase the engine’s RON requirements and cause the engine to knock when RON95 is used. These carbon deposits can heat up in a hot engine and cause pre-spark detonation.

Older cars/engines without a knock sensor to automatically adjust ignition to compensate for knocking are especially prone to damage, but the thing is for a knock sensor to do its job the engine actually has to start knocking first before the knock sensor can “sense” it so there is still some potential for damage!

This is bad for the engine! If you assume a typical reason that a person using an old car with an old engine because he or she is not very well to do and cannot afford something newer, I am sure you don’t want to put that person into a situation where he has to fork out more money in maintenance because of high temperature detonation damage!

If you want to look at it from the rakyat’s point of view, instead of pricing RON97 higher to encourage RON95 consumption, the government should think of ways to educate people about why they should just save their penny and use RON95 instead if their cars can take it. Tax the “premium” RON97 Shell V-Power as much as you want but leave the option open for decently-priced RON97 fuel for those who really need it. But then again you could also say we should all just learn to adjust to what some say are impending permanent high fuel prices and get on with a new “gaya hidup”.

Related Posts:
What is Research Octane Number (RON)

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The second major change is a switch to a floating system for RON97 petrol according to international oil prices from July 2009 onwards. It was not indicated whether this would be a daily, weekly, twice a month or monthly float. Since prices are now determined twice a month perhaps it may change to a more frequent weekly float. RON97 is considered by the government to be a “premium fuel’ and thus will not be subsidised. Petrol retailers also told Business Times that not only will RON97 not enjoy subsidies, it might even be taxed!

Lastly, diesel in Malaysia will be upgraded from current MS123 standards to Euro 2M standards.

Related Posts:
Cheaper RON95 fuel to be introduced mid-2009
APM: How fuel prices are calculated in Malaysia
Malaysian diesel to be Euro 2M grade in 2009

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The formula used to calculate the price of fuel is called the Automatic Pricing Mechanism (in place since 1983) and its function is to stabilize the price of petrol and diesel in the country to a certain extent, via a variable amount sales tax and subsidy, so the retail price only has to be changed if the difference in price exceeds the threshold of the tax and subsidy, at the discretion of the government.

In the table on the left, you can see that the Cost Of Product is not derived from the price of Crude Oil on the NYMEX, but it is based on the Mean of Platts Singapore (MOPS). The cost is the already refined product, which means the refinery cost are already included and indexed in the MOPS.

You may ask what exactly is the MOPS? Many countries in this region base their fuel prices on the MOPS, including alot of ASEAN countries and even Australia. The index is tracked, assessed and updated by Platts, a McGraw-Hill company in Singapore and is based on the daily average of all trading transactions between buyer and seller of petroleum-based products.

A buyer of a finished (refined) oil product will refer to the MOPS index as a better indicator/benchmark of world prices rather than crude oil prices. The MOPS price typically has a premium over the crude oil prices. This is why the Malaysian government uses MOPS to determine fuel prices rather than NYMEX crude oil prices. Unfortunately it is hard to track MOPS prices as individuals because the data is only available to those who purchase it, unlike the publicly available charts from the NYMEX.

Next up is “Alpha”, which is fixed at 5 sen per liter for petrol and 4 sen per liter for diesel. This is sort of a buffer for the oil companies. If the price of the product that the oil companies buy is higher than the MOPS published price, and the difference is higher than Alpha, the oil company will bear the extra cost, and vice versa.

Operational costs should be self explanatory. They are set at 9.54 sen per liter, 8.98 sen per liter and 8.13 sen per liter for the Peninsular, Sabah and Sarawak respectively. Operational costs cover transport and marketing costs. Then comes where the oil companies make money, which is set at 5 sen per liter for petrol and 2.25 sen per liter for diesel. The stations make more money per liter of petrol – 12.19 sen per liter for petrol and 7 sen per liter for diesel.

Sales tax and subsidies are combined. According to the Sales Tax Act 1972 (this is not something new!), the government CAN collect a maximum sales tax of 58.62 sen per liter for petrol and 19.64 sen per liter for diesel. This comes into effect when the real price of petrol and diesel at the pumps are lower than the fixed retail price. The government can pocket this, or it can revise the fixed fuel price to be lower to remove the difference in price so the savings go into the rakyat’s pocket.

On the other hand, if the fixed retail price is lower than the actual cost of the petrol and diesel at the pumps, the government can pay a subsidy of the same range. Right now the government says it will give a maximum subsidy of 30 sen per liter instead of the maximum allowable subsidy of 58.62 sen per liter, IF NEEDED. This 30 sen maximum subsidy is as part of an improved Automatic Pricing Mechanism, which the Ismail Ahmad says is designed to stabilize fuel retail prices and allow industry players to manage expenditure in a more orderly manner.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Source

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

Well, don’t keep your hopes up high as Datuk Shahrir Samad says average crude prices have remained at a similiar level this month compared to the previous, so no fuel price revision is expected. However he does have some new updates for us regarding fuel prices.

By middle of this year, RON95 will be introduced to provide cheaper fuel so that people who have cars that aren’t so demanding on the octane levels can use it. But RON97’s price will be increased via a fuel tax, which will be used to subsidise the new RON95 fuel. RON95 will replace RON92 and is expected to be priced at the same level as RON92 is currently. He expects RON92 fuel to be an average of 10 to 11 sen cheaper than RON97.

His ministry will also reveal a chart on how retail fuel prices in Malaysia are calculated next week, which should put an end to endless questions by consumers on how the prices are calculated and how much the government is making from us via fuel taxes, if they are earning any at all of course. All of this will be answered next week, if things go as planned. Fuel prices in Malaysia are dependent on Singapore’s Mean of Platts Singapore (MOPS), a regional fuel price monitor. Australia also uses MOPS to calculate their fuel prices.

Source

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

We are finally going to get a decent level of diesel quality in Malaysia! It’s not Euro 4M or anything like that, but it’s still an improvement over the current standards.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said Euro 2 diesel will be offered at all refueling stations in Malaysia in 2009. Sulphur content will be reduced from the current 3000ppm standard to a new standard of a maximum of 500ppm. He added that the Ministry is also proposing to oil companies to set the prices of lubricants according to world crude oil prices. This will be discussed next year.

It has not been decided yet whether this new Euro 2 diesel will be priced higher than the current price of diesel (RM1.70 per liter at publishing time), but Datuk shahrir says the difference would not be much especially during these period of low crude oil prices, so now is the right time to make this change.

This blog carried a story early last year quoting a presentation by Harlina Firdaus Marzuki and Fazil Mat Isa of Petronas Research & Scientific Services. At that moment of time there were 6 retailers of diesel fuel in Malaysia.

According to their research, 5 out of 6 of the diesel retailers in Malaysia already sell diesel that complies to Euro 2 levels of sulphur, although some other specifications fail Euro 2 standards, thus making these fuels not exactly qualified to be called Euro 2. Sulphur levels range between 500ppm to as low as 200ppm, but only one retailer was selling diesel with high sulphur content – 2800ppm!

The same research paper (you can read it via the link below) also revealed the properties of RON97 petrol retailed by the different brands in Malaysia. Who says all fuel are the same?

Related Posts:
Analyzing fuel quality in Malaysia

Source

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The following are the new prices of fuel in Malaysia effective midnight, the 16th of December 2008:

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The government can easily set a ceiling price for fuel according to the average price of fuel or however they’ve been determining it currently, but stations should be allowed to sell fuel lower than that if they want to. The whole idea is that some companies could run their business more efficiently and translate the savings to people, or even decide to just reduce the profit they make on each liter of fuel in hopes of selling more liters. Competition could be beneficial for consumers.

Some countries are like this this, for example Australia and the USA where prices could be different between various retailers and locations. The first step would be to allow such discounting to actually happen, then we have to wait and see if any of the fuel retailers are willing to become the “Digi” of their industry and offer aggressive attractive pricing to pull more users over.

Source

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The following are the new prices of fuel in Malaysia slashed by 10 sen each effective tomorrow, the 3rd of December 2008:

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

However, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad announced that the country would receive another round of fuel price cuts before Hari Raya Haji which falls on the 8th of December 2008, so expect something before the end of this week as the 8th is next Monday, or perhaps an announcement will be made on the day itself.

Datuk Shahrir also said that the drop would be a maximum of 15 sen per liter and would only be for RON97 and RON92 fuel as diesel is still being subsidised. We could be looking at RM1.85 per liter for RON97 petrol and RM1.75 per liter for RON92 petrol, which would make diesel more expensive than petrol at the pumps if diesel fuel’s current RM1.90 price tag does not get slashed!

Look like we’ll have to put up with crap diesel for quite some time, but now we could have to pay more than RON97 petrol for it as well.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

He also said the National Economic Council will meet on the 1st of December 2008 to decide on a fuel price float mechanism where fuel prices would be revised at a certain interval according to global crude oil prices, with a 30 sen fuel subsidy to be given only when necessary so there will probably be some form of upper-end threshold before the subsidy kicks in. The matter of a lower-end threshold (a floor price for fuel) is still being decided, but if the government goes ahead with one we’ll see us paying a fuel tax for every liter if crude oil prices drop below the floor price.

But let’s hope we won’t see Fomca’s wishes come true. Fomca (Federation of Malaysian Consumer Associations) spoke to the NST on Sunday and said they would like to see a minimum price of RM3 per liter to encourage prudent use of petrol, push for alternative energy R&D and promote the use of public transport.

Obviously Fomca secretary-general Muhammad Sha’ani Abdullah lives right next to an LRT in an area where buses are clean, well-maintained and always on time because I sure don’t and I’m sure many others do not.

Source 1, Source 2

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The best part or should I say the most hopeful part is he says the government will be trying to price it at the same level as RON92 fuel, which is currently about 10 sen (or 5%) cheaper than RON97 fuel at RM1.90 per liter versus RM2.00 per liter for RON97. If they do this, they also have to work on getting more stations to stock the lower octane fuel as some of them currently only stock RON97 fuel.

Many engines are tuned to run either on RON91, RON95 or RON98, with RON98 being rare but commonly specified for rather aggressively tuned high compression engines like the Honda Civic Type R or even the BMW’s N52 normally aspirated engine family.

It’s not much of a saving, but it’s still something. Even some budget cars like the new Proton Saga with the 1.3 liter Campro IAFM engine requires at least RON95 so it cannot use the cheaper RON92 fuel. Replacing RON92 with RON95 will allow the new Proton Saga to use a cheaper grade of fuel and not pay for something it does not need.

In other related fuel price news, Datuk Shahrir also said the government deserves to profit from low crude oil prices via fuel taxes as it had given out subsidies on per liter fuel prices when crude oil prices were high, as well as the RM625 rebate.

However it seems that the fuel tax revenue that the government is earning right now is only a temporary thing until they decide whether to set a floor price for fuel, which will be discussed on the 1st of December 2008.

Source 1, Source 2

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

As of today, Malaysians have begun paying tax for their fuel again… in fact the government has not had to pay the promised RM0.30 per liter fuel subsidy since the beginning of November 2008 due to the dropping crude oil prices which leads to lower refinery prices.

According to Minister of Domestic Trade and Consumer Affairs Datuk Shahrir Samad, the government also collected taxes for fuel from September 2001 to February 2002, but after that period crude oil had gone up so the government had stopped collecting taxes to prevent fuel prices from going up too much.

From the current price of RM2 per liter from RON97 petrol, roughly 12 sen goes to the petrol stations and roughly 19 sen goes to the oil companies. The balance is RM1.69, but Shahrir says this is actually higher than the refinery price.

While he did not say exactly how much refinery prices were at the moment (this will go up and down according to crude oil prices), he gave an example of RM1.30 per liter. This means the government can make as much as 39 sen per liter of fuel, and this amount will vary as the refinery prices go up and down along the month.

Because of the change of situation and the potential now for long-term income from the sale of fuel in this country, the government Economic Council will be meeting this month to decide on a new mechanism for petrol pricing in the country. Things that could be discussed are how often should price revisions be made, and what kind of tolerances towards crude oil prices should there be. I would imagine they could decide on something like a maximum tax when crude oil prices are low (or alternatively, a floor price for petrol), and a maximum subsidy when crude oil prices are high.

It’s sad to see the government so easily turn its back on its promise of a RM0.30 per liter subsidy, but Datuk Shahrir is of the opinion that the current low fuel prices are quite fair and there’s no need to go drop them too much even though the government won’t have to pay fuel subsidies per liter. He says this additional revenue will be used to strengthen the economy in face of the threat of the recession.

I’m pretty sure the Cabinet is happy with Shahrir’s performance as Minister of Domestic Trade and Consumer Affairs so far. He’s done his job well in helping tighten the government’s coffers, though many would argue it isn’t in the interest of “Consumer Affairs” at all.

All we can do is hope that the money saved and earned will be used in the right channels by those who have the nice job of choosing where to spend the money.

BTW, no one has revealed what the margins, subsidies and revenues are for diesel. Is there room to upgrade to something with less sulphur so we can enjoy cars like the Ford Focus TDCi and a potential upcoming diesel Honda City?

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

But no worries, the good news is there will be a price cut after all, and its once again an amount of 15 sen that will be effective midnight tonight.

The following are the new prices of fuel in Malaysia slashed by 15 sen each effective tomorrow, the 18th of November 2008:

In other motoring-related news, the Deputy Prime Minister Datuk Seri Najib Tun Razak revealed that the Cabinet had discussed recently on whether to declassify the country’s toll concession agreements, but he declined to reveal any result, instead prefering to leave it to the Works Mnister Datuk Mohd Zin Mohamed to make a statement.

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.

The government announced previously that it aimed for the fuel prices to be revised every 2 weeks and it has kept to this for the past month or so quite diligently. Each round of revisions brought cuts, with the most recent being a 15 sen cut to RM2.15 per liter for RON97 petrol and RM2.05 per liter for RON92 petrol and diesel. This came into effect on the 1st this month.

Anyone want to try to guess how much the cut will be this time?

© 2009 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Sun, 22 Nov 09 06:56:06 +0800.