RON92 -> RON95 <- RON97
If you haven’t read by now, on 1 September 2009, the Malaysian government is planning to change the grade of petroleum sold at pumps.
- Petrol price: RON97 to cost 20sen more (The Star 12 May 2009)
- RON97 to cost more from September (The Star 13 May 2009)
The title says it all. Or does it?
Basically, the government’s plan is to phase out RON92 grade petrol and replace it with RON95. Read this article if you’re not familiar with the term RON and what it means. The reasoning behind the change is that most vehicles on the Malaysian roads today can utilise RON95 grade fuel and doesn’t require the higher grade RON97. As such, RON97 will be sold as an alternative at a premium pump price. Current pump prices and projected price comparison based on the replacement fuel grade as follows:
| Current (15 May 09) | Replacement (1 Sept 09) | Difference/Litre | ||
|---|---|---|---|---|
| Petrol Grade | Price/Litre (RM) | Petrol Grade | Price/Litre (RM) | |
| RON92 | 1.70 | RON95 | 1.75 | +0.05 |
| RON97 | 1.80 | RON95 | 1.75 | -0.05 |
| RON97 | 1.80 | RON97 | 2.00 | +0.20 |
Going by the table above, those who are currently using RON92 would be required to pay 5sen more per litre when they are forced to upgrade to RON95. In the meantime, those who are currently using the RON97 grade who are able to downgrade to RON95 will stand to save 5sen per litre while those who can’t downgrade stand to pay an additional 20sen in premium. Seems like a raw deal for those who can’t are not using RON97 or cannot downgrade to RON95. Those in the mid range would profit, or would they?
This latest move by the government effectively readjusts the pump rates very close to the market rates and lifts any subsidies that the government is currently paying for both RON92 and RON97 grade fuel. I personally don’t have any issues with this since I’ve always been a advocate of the removal of fuel subsidies and going with a free market for petrol. I believe it would provide for a more realistic and stronger economy *Terms and conditions apply*. What do you think? Is this a good or bad thing in your books?
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