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DPM: We cannot sustain subsidies on the same amount

Earlier this month, RON 97 petrol shot up by 20 sen to RM2.90 per litre. It was actually the fifth monthly increase in a row for RON 97 since December 2010, but it does not affect the majority of Malaysians, who continue to pay RM1.90 for RON 95 fuel. But will there be an upward revision of RON 95 prices?

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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RON97 fuel – RM2.90 per liter as of 5th May 2011

According to Malaysiakini, the price of RON97 fuel will be increased to RM2.90 per litre at midnight today, up 20 sen from the previous price of RM2.70 which was on the 1st of April 2011.

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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RON97 up by 20 sen tomorrow to RM2.70 a litre

Well, according to a report, the pump price for RON97 petrol is to be hiked by 20 sen a litre effective midnight, bringing it back to the RM2.70 per litre mark.

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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RON97 petrol up 10 sen to RM2.50 per liter tonight?

When I first read Petrol Dealers Association of Malaysia (PDAM) president Hashim Othman saying the current situation in Egypt could disrupt the supply of oil and make the price of crude oil go up, resulting in a RON97 hike according to the government’s “formula”, I knew a fuel hike was on the way.

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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Euro 4M petrol and diesel to be announced in Malaysia before year end, B5 biodiesel in June?

Fuel-Wallet GaugePlatts has some interesting information on what’s happening with the proposed implementation of Euro 4M fuel standards for both petrol and diesel in Malaysia.

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.

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RON97 up 10 sen to RM2.40 per litre at midnight

Fuel-Wallet GaugeWhat goes up does not come down – RON97 has been hiked again by 10 sen to RM2.40 a litre effective midnight, just about a month after the last hike on the 1st of December last year which saw the price of the higher octane fuel go up 15 sen.

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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RON95 prices up 5 sen to RM1.90 per liter tonight!

Fuel-Wallet GaugeLooks like it’s confirmed – RON95 will be increased by 5 sen tonight making it RM1.90 per litre, according to a report by mStar citing Datuk Ruhaidini Abdul Kadir, Press Secretary for the Minister of Domestic Trade, Cooperative and Consumer Affairs. It’s official: in addition to RON95, diesel is up 5 sen to RM1.90, LPG up 5 sen to RM1.90/kg, and sugar up 20 sen to RM2.10/kg. RON97 remains at its recently hiked RM2.30 price.

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Another round of fuel price hikes across the board?

Fuel-Wallet GaugeIs it time for us the motorists of Malaysia to brace for yet another round of fuel price hikes right after RON97 went up 15 sen at the beginning of this month? The Malaysian Insider reports that key players including Dometic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob and Pemandu CEO Datuk Seri Idris Jala will meet today to discuss another round of fuel hikes at 3 PM today, this time across the board, affecting other fuels such as LPG, and RON95 petrol. Word is that another fuel hike could be announced as early as this evening. RON95 is currently sold at RM1.85 per litre while the recently hiked RON97 goes for RM2.30 per litre. Diesel is sold at RM1.75 per litre to the public.

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RON97 price – RM2.30 per liter from 1st December 2010

Fuel-Wallet GaugeMotorists who are using RON97 for their cars will have to pay an extra 15 sen per litre beginning tomorrow – 1st of December 2010. The new price for RON97 will be RM2.30 per litre.

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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RON97 petrol price increased to RM2.15 per liter

Fuel-Wallet GaugeRON97 has been hiked to RM2.15 per litre – a small increase of 5 sen, effective today. It was last raised from RM2.05 to RM2.10 back in July 2010, when all three types of regulated fuel were hiked by 5 sen, but this time around only RON97 is affected. RON95 remains at RM1.85 per litre for now, and diesel still goes for RM1.75 per litre. I’m expecting V-Power Racing to go up by an amount as well, but I do not have any idea how much at the moment – anyone know? Please share in the comments!

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