JOHOR BARU: The subsidy on petrol may be revised with the bulk going to the regular type so that prices will be kept down for the average motorists. Under the plan, the existing classes of petrol at the pump — Octane 92 and Octane 97, commonly referred to as RON 92 and RON 97 — will be abolished and replaced by Octane 95 and Octane 99. Octane 92 is used mainly by motorcycles while other vehicles normally use Octane 97. Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad, who disclosed this yesterday, said Octane 95 could be used in most vehicles and would be the fuel of choice for low- and middle-income earners. The government would also introduce Octane 99, a premium fuel that costs more than Octane 95 or 97, that is usually used in performance luxury cars and Sports Utility Vehicles (SUVs). Under the proposed system, Shahrir said, subsidies would be mainly used to keep the price of Octane 95 low. The price of Octane 99 will still be subsidised but to a lower extent. “The goal is to have subsidies targeted and more focused at those who need it, such as the lower- and middle-income group, and giving a choice to the rich on what petrol they want to fill in their tanks,” Shahrir said. “We are subsidising a form of petrol that is of a high quality, but I was informed by Proton that a majority of cars can use Octane 95. “The Octane 97 that we use benefits luxury cars.” The new system is expected to benefit lower- and middle-income groups as the subsidies are targeted at a fuel that they would most likely use, Octane 95. The rich can use Octane 95 in their Mercedes cars, BMWs and SUVs but it would not give them the performance that comes with the higher quality Octane 99. The proposal is being considered by the government following a meeting of the Cabinet Committee on Inflation chaired by Prime Minister Datuk Seri Abdullah Ahmad Badawi recently. In January, Second Finance Minister Tan Sri Nor Mohamed Yakcop was reported as saying that the government would have to spend up to RM35 billion a year to subsidise the price of Octane 92, Octane 97 and diesel if world oil prices remain above US$100 (RM320) per barrel. Octane 92 is sold at RM1.88 per litre at pumps in Peninsular Malaysia, Sabah and Sarawak. Octane 97 is priced at RM1.92 per litre in Peninsular Malaysia while in Sabah it is RM1.90 and RM1.91 in Sarawak.

Shahrir said the government was expected to save more money by allocating most of the subsidy into a single type of fuel, Octane 95, as opposed to subsidising two types of fuels, Octane 92 and Octane 97. Octane 95 is lower in quality than Octane 97, but it can be used in most vehicles in Malaysia and is commonly used in a number of Asian and European countries. “The system is a shift in how we price petrol, but it is necessary if we are to lessen the burden on the lower- and middle-income groups.” [source: nst]

Syokkahwin.com: Good thinking by The Government. This way, market can be seggregated and charged differently. Owners of BMWs and Mercedes wouldn’t want to use Octane 95 type because it will affect the cars’ performance and from my experience it can cause start up problems. Octane 95 is good enough for Kancils, Waja’s, Persona’s and other midrange cars with low cc’s. May be the Government can increase the price of Octane 99 to RM2.00/litre to subsidise the price of Octane 95 to RM1.90/litre. For those still wonder why they want to use Octane 95 instead of Octane 97, here’s a little explanation for you. Well it’s simply because so it can be used by cars in addition to motorcycles.

Share This