Fuel Price Now Versus Then
Since the newly elected Pakatan Harapan government came into power, significant changes have been made, one of them being halting the managed float system where petrol prices fluctuated weekly.
The promise, which was one of the points harped on in their manifesto, was cemented once Prime Minister Tun Dr Mahathir Mohamad announced that petrol prices will once again be subsidised during his first press conference after being sworn in on May 10, 2018.
Previously, the managed float system, which was implemented on December 1, 2014, saw prices changed monthly in the initial stage, before the government readjusted it to a weekly float system.
However, when the 14th General Election approached, prices became stagnant at RM2.20 (RON95), RM2.47 (RON97) and RM2.18 (diesel) and these rates remained unmoved after elections concluded.
What is managed float system, and how will the fuel subsidy work?
The managed float system came into play when the former government abolished fuel subsidies in 2014 in a bid to curb government expenditure.
Former Prime Minister Datuk Seri Najib Razak had said the float system would benefit the socio-economic system as the government would be able to save and allocate the funds to other sectors.
Najib also said this was put in motion to combat leakages and losses, as the rich benefited more than the poor when it came to fuel subsidies. This is because the prices were set the same on all cars – luxury or not.
With this system, it followed the global price for oil and the government had set pump prices based on the average cost of refined oil (MOPS fuel) of the preceding week.
Basically, if the price of the oil increased the previous week, the retail prices for the corresponding fuel would also increase, and vice versa.
Now, following the birth of a new government, Malaysia has stabilised the petrol prices for now, with fuel subsidies expected to be announced. However, the mechanics of this has yet to be confirmed.
Principally, subsidies are when the government grants a certain economic sector a sum of money to encourage more production or consumption.
This means the government allocates a sum to the industry to allow the oil and gas companies to produce more for consumption at a price that is below market rate. Hence, regardless if fuel prices were to increase, prices will remain according to the set rates and the government will subsidise any extra costs.
Additionally, these fuel subsidies are also tax payer funded and also lowers the costs for producers to bring oil into the market.
It was announced that RON95 and diesel prices will remain unchanged, but RON97 is subjected to a float system beginning June 7, 2018. Prices will be refreshed every Wednesday.
Back in April 2015, RON97 was subjected to 6% Goods & Services Tax (GST), but this will be removed as GST has been zero-rated. However, Finance Minister Lim Guan Eng said the price of RON97 will not be reduced despite being zero-rated, and will only change once the float system has been set in motion.
Here is the current price of RON97:
(-RM0.04) |
Moreover, among Pakatan Harapan’s 100-day promises were targeted petrol subsidies for cars below 1,300cc and motorcycles below 125cc. However, this has yet to be implemented, nor the mechanism been announced.
Although prices at pump has remained the same since end of March 2018, the global crude oil price has increased to US74.51 per barrel at the end of May 2018. The crude oil price was at US68.63 per barrel at the end of March.
This means the government has been subsidising the petrol for everyone in the country since before election.
However, with targeted fuel subsidy potentially in the works, we are unsure of how it will financially impact our wallets.
History of petrol prices with managed float system
We saw petrol prices went as low as RM1.60 per litre of RON95 in March 2016. The highest it has gone since the implementation of the managed float system is RM2.38 for RON95, RM2.61 for RON97 and RM2.32 for diesel.
At one point, the price for RON97 was so affordable, many drivers in Malaysia started pumping the premium fuel. However, we conducted a test on whether RON97 trumps RON95 and here’s what we found.
RON95 v RON97: Which is the better fuel?
On paper, RON97 is more expensive than RON95 and considered to be of higher quality. But is it better for your engine and does it enhance the performance of your car as compared to RON95?
We did the “dyno” test a while back to put this theory to the test. Our reason for this was to simply test a vehicle – in this case, it was a stock Myvi 1.5 – in a controlled environment, limiting the number of variables in your test such as different road conditions, traffic or even driving styles.
What we found is that it only matters if your car has been optimised for a certain type of fuel. For example, in our test, we discovered that the Myvi 1.5 we used had been optimised for RON95 fuel usage.
This applied vice versa. If someone drove a RON97-optimised auto, such as the Suzuki Swift Sport, using RON95 would likely cause that car to perform less efficiently.
But the point is this: unless your car’s engine requires RON97, there’s really no point in spending more on premium fuel as it does not really give you an added performance advantage.
For more on our dyno test, click this article link.
Here are the historical petrol prices in Malaysia since the implementation of the managed float system:
Meanwhile, these are the previous petrol prices under the managed float system.
| Dec 1, 2014 | |||
| Dec 1, 2015 | |||
| Dec 1, 2016 | |||
| Mar 30 - Apr 5, 2017 | (-0.17) | (-0.19) | (-0.09) |
| Apr 6 - Apr 12, 2017 | (+0.03) | (+0.02) | (-0.03) |
| Apr 13 - Apr 19, 2017 | (+0.08) | (+0.09) | (+0.08) |
| Apr 20 - Apr 26, 2017 | (+0.03) | (+0.02) | (+0.05) |
| Apr 27 - May 3, 2017 | (-0.06) | (-0.05) | (-0.07) |
| May 4 to May 10, 2017 | (-0.10) | (-0.10) | (-0.06) |
| May 11 to May 17, 2017 | (-0.10) | (-0.10) | (-0.13) |
| May 18 to May 24, 2017 | (+0.07) | (+0.07) | (+0.04) |
| May 25 to May 31, 2017 | (+0.04) | (+0.04) | (+0.04) |
| June 1 to June 7, 2017 | (-0.02) | (-0.02) | (-0.01) |
| June 8 to 14, 2017 | (-0.05) | (-0.07) | (-0.08) |
| June 15 to 21, 2017 | (-0.07) | (-0.07) | (-0.06) |
| June 22 to 28, 2017 | (-0.07) | (-0.07) | (Unchanged) |
| June 29 to July 5, 2017 | (-0.02) | (-0.02) | (-0.04) |
| July 6 to 12, 2017 | (+0.04) | (+0.04) | (+0.07) |
| July 13 to 19, 2017 | (+0.04) | (+0.03) | (+0.05) |
| July 20 to 26, 2017 | (Unchanged) | (Unchanged) | (Unchanged) |
| July 27 to August 2, 2017 | (+0.06) | (+0.06) | (+0.03) |
| August 3 - 9, 2017 | (+RM0.04) | (+RM0.04) | (+RM0.06) |
| August 10 - 16, 2017 | (+RM0.05) | (+RM0.07) | (+RM0.01) |
| August 17 - 23, 2017 | (+RM0.03) | (+RM0.04) | (-RM0.02) |
| August 24 - 30, 2017 | (unchanged) | (unchanged) | (-RM0.03) |
| August 31 - September 6, 2017 | (+RM0.01) | (+RM0.01) | (+RM0.03) |
| September 7 - 13, 2017 | (+RM0.04) | (+RM0.04) | (+RM0.01) |
| September 14 - 20, 2017 | (+RM0.01) | (+RM0.04) | (+RM0.09) |
| September 21 - 27, 2017 | (-RM0.02) | (-RM0.03) | (-RM0.04) |
| September 28 - October 4, 2017 | (-RM0.03) | (-RM0.03) | (+RM0.02) |
| October 5 - October 11 2017 | (+RM0.03) | (+RM0.03) | (+RM0.05) |
| October 12 - October 18 2017 | (-RM0.03) | (-RM0.03) | (-RM0.07) |
| October 19 - October 25 2017 | (+RM0.01) | (+RM0.01) | (+RM0.01) |
| October 26 - November 2 2017 | (+RM0.03) | (+RM0.03) | (+RM0.02) |
| November 3 - November 9 2017 | (+RM0.07) | (+RM0.06) | (+RM0.05) |
| November 10 - November 16 2017 | (+RM0.04) | (+RM0.04) | (+RM0.02) |
| November 17 - November 23 2017 | (+RM0.07) | (+RM0.06) | (+RM0.05) |
| November 24 - November 29 2017 | (-RM0.08) | (-RM0.08) | (-RM0.02) |
| November 30 - December 6 2017 | (unchanged) | (unchanged) | (unchanged) |
| December 7 - 13 2017 | (-RM0.01) | (-RM0.01) | (-RM0.02) |
| December 14 - 20, 2017 | (-RM0.04) | (-RM0.05) | (-RM0.01) |
| December 21 - 27, 2017 | (+RM0.02) | (+RM0.02) | (+RM0.03) |
| December 28, 2017 - January 3, 2018 | (-RM0.01) | (-RM0.01) | (+RM0.03) |
| January 4 - 10, 2018 | (+RM0.03) | (+RM0.03) | (+RM0.06) |
| January 11 -17, 2018 | (-RM0.03) | (-RM0.03) | (unchanged) |
| January 18 - 24, 2018 | (+RM0.04) | (+RM0.04) | (unchanged) |
| January 25 - 31, 2018 | (-RM0.01) | (-RM0.01) | (-RM0.01) |
| February 1 - 7, 2018 | (+RM0.02) | (+RM0.02) | (+RM0.03) |
| February 8 - 14, 2018 | (+RM0.02) | (+RM0.03) | (-RM0.03) |
| February 15 - 21, 2018 | (-RM0.10) | (-RM0.11) | (-RM0.12) |
| February 22 - 28, 2018 | (-RM0.06) | (-RM0.07) | (-RM0.06) |
| March 1 - 7, 2018 | (+RM0.03) | (+RM0.04) | (+RM0.05) |
| March 8 - 14, 2018 | (+RM0.01) | (unchanged) | (-RM0.01) |
| March 15 - 21, 2018 | (-RM0.03) | (-RM0.02) | (-RM0.01) |
| March 22 - 28, 2018 | (+RM0.02) | (+RM0.02) | (+RM0.02) |
| March 29 - April 4, 2018 | (unchanged) | (unchanged) | (unchanged) |
| April 5 - 11, 2018 | (unchanged) | (unchanged) | (unchanged) |
| April 12 - 18, 2018 | (unchanged) | (unchanged) | (unchanged) |
| April 19 - 25, 2018 | (unchanged) | (unchanged) | (unchanged) |
| April 26 - May 2, 2018 | (unchanged) | (unchanged) | (unchanged) |
| May 3 - 9, 2018 | (unchanged) | (unchanged) | (unchanged) |
| May 10 - 16, 2018 | (unchanged) | (unchanged) | (unchanged) |
| May 17 - 23, 2018 | (unchanged) | (unchanged) | (unchanged) |
| May 24 - 30 2018 | (unchanged) | (unchanged) | (unchanged) |
| May 31 - June 6 2018 | (unchanged) | (+RM0.19) | (unchanged) |
| June 7 - 13 2018 | (unchanged) | (-RM0.06) | (unchanged) |
| June 14 - 20 2018 | (unchanged) | (-RM0.01) | (unchanged) |
| June 21 - 27 2018 | (unchanged) | (-RM0.09) | (unchanged) |
| June 28 - July 4 2018 | (unchanged) | (+RM0.08) | (unchanged) |
| July 5 - 11 2018 | (unchanged) | (+RM0.01) | (unchanged) |
| July 12 - 18 2018 | (unchanged) | (-RM0.03) | (unchanged) |
| July 19 - 25 | (unchanged) | (-RM0.02) | (unchanged) |
| July 26 - August 1 2018 | (unchanged) | (+RM0.10) | (unchanged) |
| August 2 - 8 2018 | (unchanged) | (-RM0.03) | (unchanged) |
| August 9 - 15 2018 | (unchanged) | (+RM0.04) | (unchanged) |
| August 16 - 22 2018 | (unchanged) | (unchanged) | (unchanged) |
| August 23 - 29 | (unchanged) | (+RM0.04) | (unchanged) |
Here are our top 7 tips to save petrol
With petrol prices fluctuating faster than your weight, it’s time to be proactive in other ways to save petrol. Here are five easy ways for you to shave some of your petrol cost off:
1. Do not leave your engine idling
For every two minutes, you leave your car idle, you are burning the same amount of petrol to travel about 1.5km. This is bad enough for those who live the city where traffic congestion is a daily occurrence.
The next time you are waiting for someone, turn your engine off. Leaving your engine idle does not only waste petrol, it is also releasing unnecessary harmful emissions. So, be kind your wallet and the environment by reducing idling whenever and wherever you can.
2. Pump up your tyres
How often do you check the inflation of your tyres? It is not only dangerous to drive with tyres that are under-inflated, it can also affect your vehicle’s fuel efficiency. The reason under-inflated tyres waste more petrol is that they create too much traction, and thus need more petrol to get them going. However, over-inflating your tyres can be dangerous. Check your tyres’ inflation regular.
3. Get your car serviced
Research suggests that fuel economy can be sustained through proper vehicle maintenance. Even if your vehicle is old, it won’t affect your fuel efficiency if you care for your vehicle well.
If you can’t remember when you last serviced your vehicle, it’s time to book an appointment with the workshop now. Set a reminder on your phone to ensure you never miss your service appointment again.
4. Plan your journeys
Make use of free GPS apps such as Waze and Google Maps when you are driving. Using GPS will help you plan your journeys effectively so you won’t make a wrong turn and waste precious fuel. Learn the route to the destination before starting your journey to avoid getting lost and being stuck in traffic. Circling round and round looking for your destination can make a huge difference to your petrol consumption, so it’s worth planning your route before you leave home.
5. Use petrol loyalty card
A penny saved is a penny earned, which why arming yourself with the right petrol brand loyalty card can help you maximise your petrol dollar simply. The best way to find the best petrol brand loyalty card that gives you the most is to, first of all, find a petrol brand that you regularly pump from. For example, a petrol brand with the nearest station to your home or workplace. Then you can narrow it down to how much you need to spend to earn points and what is the value of the points. Petrol loyalty card such as the Petron Miles card also gives you additional discounts and privileges from other merchants.
Check our comparison of petrol brand loyalty cards to help you decide!
6. Use the right credit card
If you spend a lot on petrol, it’s time to get yourself the right credit card to cut your fuel cost every month. The best petrol credit card should give you good cashback or rewards points on your petrol spending at the petrol brand that you purchase from. Some cards only offer cashback or points at certain petrol brands, while cards like Maybank 2 Cards American Express do not restrict the petrol brand and it allows you to earn 5x TreatPoints every day and an additional 5% cashback on weekends.
7. Drive manual transmissions vehicle
According to Budget Direct, manual transmissions save drivers between 5% and 15% on their fuel costs. The reason for this is because manual transmission engines tend to be less complex, weigh less (weight savings = fuel savings), and have more gears than automatics (which lets you optimise on fuel savings). Although there are exceptions to the rule, manual cars do help you save fuel and they also tend to be cheaper than their automatic counterparts, and require less maintenance, which will save you money in the long run.
Best petrol credit cards in Malaysia
Sometimes the circumstances may not allow us to cut down on petrol expenses. This is why having the right credit card can help you manage your fuel expenses significantly. Here are some of the best petrol credit card in Malaysia:
Citi Cash Back Card
This card offers 10% cashback on petrol monthly when you spend more than RM1,000 otherwise you can enjoy 0.2% when you spend less than that.
However, if you are the type who can’t be bothered to time your petrol spending, this will be a no-fuss card for you. Other than high cashback for petrol, the Citi Cash Back Card also offers unlimited 0.2% cash rebate on other retail spending which is capped at RM10 for normal card users and RM15 for platinum.
This card only requires a minimum income of RM3,000 a month.
Citi Cash Back Card
Up to 10% cashback on your petrol!
0.2% cashback on other retail spendingHSBC Amanah MPower Platinum Credit Card-i
If the bulk of your petrol spending is on the weekend AND you spend on average RM2,000 a month on your card, the HSBC Amanah MPower Platinum Credit Card-i would be a good petrol credit card for you. With up to 8% cashback, you can save up to RM50 every month.
It requires a minimum monthly spending of RM2,000 on your card to unlock the high cashback. Furthermore, there is no annual fee!
Additionally, this card also provides up to 8% cashback everyday when you shop at at Giant, Tesco, AEON Big and Mydin if you spend a minimum of RM2,000 monthly.
HSBC Amanah MPower Platinum Credit Card-i
Up to 8% cashback everyday on your petrol spending at Shell, Caltex, Petronas and BHP.
Enjoy up to 8% cashback for groceries!
Leave your comment