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Little difference, thus buy RON97 instead?

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RON97 gives you more power. RON95 gives you less. Thats what everyone says. It’s also proven scientifically apparently. RON91? It’s dirty and will damage your engine more than RON95 or RON97. Well, fyi, RON91 is loved by many Australians still, today and majority of cars are built to use RON91 including my rented Hyundai Elantra. So, what happens when Ron97 is not that expensive when compared to RON95? Well, everyone pumps it! This is despite the fact that many are still complaining that with the world oil price dropping so much, the petrol prices should go down more than just the 4 cents. Personally I think the market has accepted that the petrol price is unlikely to go back to the subsidy days of yesterday. This will happen whether or not we change government. When we look at Indonesia and Thailand as the nearest example, we would see that the petrol prices in Malaysia still have room to move upwards. Their petrol prices are already more expensive than us but the number of cars entering their roads per year is still growing year after year. In terms of income, they are nowhere near the typical medium income Malaysians as yet. See the relevance?

Ok, in Malaysia, RON97 is now facing shortage and the oil companies are working hard to replenish the stations. Current difference? RON95 (RM2.26 per litre) and RON97 (RM2.46). Difference of 20 cents per litre. Most cars can easily do 10km per litre which meant that per km the difference is 2 cents or less. Assuming one whole year of 20,000km travel, that’s just RM400. Difference per month? Well, RM33 or about RM1 per day. Suddenly do you see some reasoning why RON97’s demand has spiked tremendously versus RON95? It has always been believed that when we use better fuel, it will help to maintain the engine better and mileage per km is also better. In other words, the savings above of RM400 per year may be even lesser. Perhaps RON97 may be even more value for money! Haha. Assuming RON97 gives you just 10% more mileage? Just 10% more mileage meant that it’s better RON97 versus RON95! Calculation: RM2.46 / 11km = 22.36 cents versus 22.6 cents for RON95. I am not sure if it’s just a feeling but when I pump RON97, it does seem smoother.

What happens if oil prices continue its drop (these few days, it has stabilised) and the petrol prices are also adjusted lower? I think we have better start looking at every businesses which increased their prices because they said petrol prices went up. These businesses should be lowering their prices, no? There was also a study which said that if petrol prices go up, the construction costs would also go up, thus the developers may pass it to buyers thus contributing to higher house prices. Okay, if petrol prices do go down further, I think the developers have to issue some new public statements yeah. I am really waiting for that. You may think I am just being sarcastic but fyi, one major reason why prices do not go up easily in Europe or even Japan is because the businesses are much more honest and are not greedy that they increase their profits ever higher every year! Their Ramen or even Fish and Chips has never doubled or tripled in prices despite all the fluctuation of petrol prices all these years but some of the FAMOUS fried char koay teow has doubled in prices and people are still queuing for it. Yes, the difference is YOU and ME. We accepted all these price increases just like that, so they would continue to increase!  Please proceed to calculate the usual costs of that plate, you think it should be sold for over RM10 simply because they said costs are increasing? Haha.. Ok, please proceed to eat it. No further comments.

written on 4 Dec 2014

Next suggested article: Buying properties? Think big, start small, my view

4 thoughts on “Little difference, thus buy RON97 instead?”

  1. To be honest, i hardly to see any business out there to reduce their price despite the oil price drops or vice versa, it is really unfair to consumer like us to be deserved at such. furthermore, no action or enforcement to be taken from authority to make it right. it seems to be this phenomenal is well deserved should be accepted by public with no question, it is really foolish.

    Reply
    • Ang, there is no such thing as authority enforcement when the public is totally ok with RM15 char koay teow. Truth is, until today there are shops selling 3 dishes economy rice at less than RM4. Yet, there are those which are selling the same for RM8. Tell me, who did not exercise their powers of choice and thus powers to control? Malaysians? Far from it. Prices I believe will continue to rise. Sigh….

      Reply
      • Hi Chialih,

        As a business. it is always instinct as a human being for taking granted to increase the price if they could.

        What i am trying to say is.. certain control with policy need to be implemented to make the market in transparent, standard and reasonable. to be frankly with no offend, a plate of char koay teow for RM15 is totally unreasonable, There is no doubt that there are people still go on with their life with a plate of char koay teow for RM15, but how many out there willingly to pay for this and could afford, i am sure that neither you and i are ok with that unless you are fully loaded with $ : )

        Being silent doesn’t mean everyone is happy with this rise but just the matter of no choice, personally, if something is not right, there should have a policy to control instead of taking it quitely, in the end, the business just increase the price in unvaluated rate as they wish, it is my main point.

  2. Be it char kueh teow or property it’s about happy seller and happy buyer. So if a person is fool enough to eat a plate with 2 small prawns for rm15 then too bad. At the end of the day it all boils down to ones budget and financial literacy. Likewise if Ron97 can help your car save 10% and clean your engine like a pro, give them the RM400. Or you can keep that rm400 and drop your body weight to save 10% petrol.

    Reply

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