RON95 petrol, fuel subsidies

From The Star:

“The price of RM1.80 for RON95 will be capped at this level for the rest of the year,’’ Zain told StarBiz, referring to a statement earlier by Minister Datuk Seri Ismail Sabri Yaakob. “It moves within an active price range, depending on the price trend of oil gauged over a one-month period.’’

All this while, consumers have been using RON97 which is too powerful for cars today. “Take a look at car manuals and one will often find that RON95 is recommended,’’ said Zain, adding that RON97 had stronger ingredients that were more suitable for higher powered cars.

RON (research octane number) measures the octane quality of fuel. It refers to the fuel’s ability to resist premature and uncontrolled combustion that occurs when fuel pre-ignites before ignition by the spark plug.

The newly-introduced RON95 fuel is priced at RM1.80, five sen higher than that of RON92, which is leaded petrol. Concurrently, RON97 has been upgraded as a premium product and its price has gone up to RM2.05 from RM1.80.

Ismail had said at a press conference on Tuesday although the price of RON95 was higher, the Government was still subsidising 33.81 sen per litre, which comes up to about RM304mil monthly.

Currently, the Government is subsidising 42.72 sen per litre for RON97.

While consumers who were using RON92 are required to pay more when they upgrade to RON95, those using RON97 and are able to downgrade to RON95 will save 25 sen per litre.

The Ron95 petrol appears to be less powerful and therefore might result in better mileage. But under the mask of the new petrol, the government is using the confusion to raise the price of gasoline and cutting off more subsidies. I'm not too sure if it's a good idea to raise prices and pass it off as a new petrol mixture. We'll have to see if people are fooled by this. I don't think they are.