Fuel Price – the week that was

When RON 95 price went up, some politicians says that recent (did not qualify how long) oil price has increased. I kind of beg to differ.

Of the recent weeks, Price increased was sparked by incident in Syria and that was only for a couple of days. The market has normalised. What surprised me was the announcement by our PM on 18 April when the crude price was at the lowest point in the year, he made an announcement that the government has increased the fuel subsidies by 10%. With the price difference, it is now at a deviation of 8.36% from the announced increased. The referred post on 1malaysia.com.my (has sinced been removed) .

However, back then, our fuel subsidy for budget 2013 was at 20b.  However, in the recent announcement, it was said “The government spends RM24b subsidising fuel every year, Abdul Wahid said. – Bernama”

This contradicts news report couple of years back when subsidies was only 15.9b. That itself was an increase of 50% from 9.5b

Let’s do the math. How many litre of fuel did we used in a year?

Based on the amount subsidised, we uses 26,498,829,039.81 Litres

Assuming that on average, each car uses median of 1500 litres a year, The total number of vehicles are 17.8m; or a mean of 973 litre per year for 27.2m vehicles. However, I don’t think that all these cars are on the road as we only have a population of 29.8m. Taking away the 5.5m of children under legal driving age, those not driving and those car that is sitting inside a showroom or storage yard, etc. The number don’t quite add up yet. If we calculated based on the total number of vehicles in Malaysia, that could mean that we have 21.25m vehicle and would consumed average of 100 litres a month.Wait, what about motorcycle? Do they use 100 litre a month?

*Assumption that all are cars and uses diesel.

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