Archive for Malaysian Fuel Prices

Good news for diesel owners! This goes out especially to those who took the leap of faith and purchased cars with advanced diesel engines like the BMW 530d and the Mercedes-Benz E270 CDI, and also highly tuned truck diesel engines such as the 2.5 liter in the new Nissan Navara.

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

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It’s the middle of the month again, which means it’s time to revise the fuel prices! In line with the lower average prices for crude oil over the past month, the government has decided to slash prices of RON97 petrol, RON92 petrol and diesel in Malaysia by another 10 sen across the board.

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

DAP gave a pretty good suggestion earlier this week with regards to how petrol and diesel is priced in Malaysia. They’ve suggested that fuel retailers in Malaysia be allowed to compete to offer the best prices at the pump.

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.

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The Prime Minister’s Office has announced that the prices of fuel in Malaysia will be slashed by 10 sen each effective midnight tonight. The slash includes diesel fuel, which is good news I suppose as it was previously indicated that diesel fuel would not get futher price cuts this time around as it was still being subsidised.

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

December 1st came and went and so did the National Economic Council meeting but the matter of the fuel pricing mechanism could not be discussed as the topic yesterday focused on the security situation in Malaysia.

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.

Datuk Shahrir Samad says fuel prices could be lowered again by another 15 sen during the next revision which is scheduled to take place at the end of this month. A 15 sen reduction would mean RM1.85 per liter for RON97 fuel, the lowest it has been in 3 years since it was previously raised to RM1.92 end-February 2006.

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.

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Minister of Domestic Trade and Consumer Affairs Datuk Shahrir Abdul Samad says we could see the addition of RON95 petrol at the fuel pumps in 2009, perhaps replacing RON92 fuel. The government had actually proposed something like this in April this year, suggesting a change of the fuels offered at stations to subsidised RON95 and unsubsidised RON99 fuel.

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

What a turn of events! In just a few months we’ve gone through a record number of petrol price hikes and reductions, the hasty introduction of a lump sum-based subsidy cheque, and more. All because of fluctuating crude oil prices.

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?

Most of us was expecting a fuel price cut to happen either on Friday or Saturday last week but the weekend came and went and nothing happened. I know some of you are probably getting a little anxious.

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.

As expected, there will be another round of fuel price revisions coming mid-November (likely the 15th of November 2008, this Friday) and Minister of Domestic Trade and Consumer Affairs Datuk Shahrir Samad indicates that it will most likely be a price cut.

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?