What Is RON95 And Why Can Only Malaysian-Registered Vehicles Pump In Malaysia?

Many of us travelling to Malaysia may have different reasons for wanting to go there, from visiting family members to short holiday trips or even to do grocery runs. One such activity that is common with Singapore plate cars despite the Three-Quarter Tank Rule is to fuel up with as much petrol (and in some cases to a comical extent) at Johor Bahru (JB).

Some of these scenes that go viral include drivers of S-plate cars raising their vehicles using hydraulic jacks to pump more fuel into the tank or getting their passengers to sway the car left to right. But none is more frowned upon than the RON95 thieves, who claim ignorance about topping the fuel grade despite the law being in force for more than a decade banning Singapore-registered cars.

Easily identified by the yellow nozzle of the fuel pump, the RON95 petrol is heavily subsidised by the Malaysian government, making it the most affordable petrol available in Malaysia. For some errant S-plate car owners this provides a strong incentive to eke out more savings on their fuel top ups.

What Do The Different Petrol Grades Mean

Aside from diesel, the three most popular types of unleaded petrol in Malaysia are RON95, R0N97, and RON100. Unlike Singapore, where RON92 is still sold at selected petrol kiosks, Malaysia discontinued it in 2009, making RON95 its default and cheapest petrol grade.

RON, short for Research Octane Number, is a measure of the petrol’s octane rating. It measures fuel quality and performance ratings at low temperatures and speeds. The higher the octane number, the more compression the fuel can withstand before detonating.

Generally, the higher-grade petrol is used on high-performance engines like the BMW 7 Series and Porsche Cayman for better performance, while the lower grade RON95 is used for normal cars like the Toyota Vios and Proton Saga.

Why Is Only RON95 Is Subsidised

Malaysia has been a producer and net exporter of oil and gas, including palm oil, since 1974. It currently produces 660,000 barrels of liquids and approximately 7.0 billion cubic feet of gas per day.

It first introduced subsidies on transport fuel in 1983 as a means to protect low-income Malaysians and stimulate economic activity and growth. The initial subsidy system was based on the automatic pricing mechanism (APM), which took reference to the Mean of Platts Singapore (MOPS) base price among other factors to ensure petrol prices were stable and affordable for the rakyat (or people).

However, as the government maintained price stability rather than allowing for market pricing, the level of subsidies became overbearing on its finances, requiring a reform in 2014. This saw the subsidies for all fuel, including RON95 and RON97 abolished on 1 December 2014. Following this, the petrol prices were pegged to a managed float mechanism, allowing them to be adjusted according to market rates.

In 2018, the then-government led by Prime Minister Tun Dr Mahathir Mohamad announced that the price of RON95 and diesel would remain fixed at RM2.20 and RM2.18 per litre, respectively. Since February 2021, the price of RON95 and diesel has been capped at RM2.05 and RM2.15 per litre, respectively.

Fuel prices in Malaysia are updated on a weekly basis. Here’s a comparison of the cost of petrol across the various grades in Malaysia and Singapore.

	Malaysia	Singapore
RON 95	RM2.05 (S$0.59)	S$2.71–S$2.76
RON 97/98	RM3.37 (S$0.97)	S$3.19–S$3.25
RON 100 /Premium	RM4.70 (S$1.36)	S$3.35–S$3.50

Accurate as of 16 June 2023. Source: Malaysia/Singapore.
(Exchange rate used S$1:RM3.46)

In February 2023, the Malaysian government authorised the sale of unsubsidised RON95 petrol in the State of Perlis for the benefit of foreign-registered vehicles. They are available for sale at RM3.22 per litre at two specialised stations in Padang Besar and Wang Kelian. This gives us a price difference of RM1.17 per litre that the Malaysian government is subsidising for every litre of RON95 petrol.

Unsurprisingly, the generous fuel subsidy scheme, which was meant to help the raykat alleviate cost burdens and keep inflation in check, has made prices of RON95 at Malaysian pumps not only the cheapest in Southeast Asia but lower than even Saudi Arabia, Opec’s largest producer. This has led to large government expenditures, with subsidies amounting to as much as RM28 billion in 2022, according to former Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

Who Can Benefit From RON95 Petrol

The sale of RON95 petrol, which is slapped with a generous government subsidy, is reserved for Malaysian-registered vehicles. It is meant to help lower-income Malaysians ease their financial burdens and keep inflation in check, which spiked in 2021.

The sale of RON95 petrol to all foreign-registered vehicles, including motorcycles, had been banned since 1 August 2010 and was later reinforced on 1 October 2020. However, foreign vehicle owners were allowed to purchase diesel limited to 20 litres per day at any petrol station within 25 km of the Malaysia-Singapore border gate. They are also allowed to purchase RON97 petrol without limit, provided it is supplied directly into the tank of the vehicle.

Read Also: How Much Can You Really Save Pumping Petrol In JB?

What Are The Penalties For Unauthorised Fuelling Of RON95

Petrol station operators caught selling subsidised RON95 petrol to foreign-registered vehicles could be fined up to RM2 million.

Under the Control of Supplies Act 1961 and Control of Supplies Regulations 1974, individuals can be fined up to RM1 million or jailed three years, or both, if found guilty, while entities and companies can be fined a maximum of RM2 million.

Read Also: 10 Ways To Save Money On Your Vehicle’s Petrol Consumption

What Are Other Options To Fill Petrol Cheaper

While the savings may not be as big as fuelling in JB, you will certainly save on the time and hassle of doing so at a local petrol kiosk.

By pairing the best credit card at the different petrol retailers, you can save as much as 25% on your fuel top-ups. For instance, the cost of 1 litre of RON95 could be reduced from S$2.71–S$2.76 to between S$2.16–S$2.40. Search for the best option using the Fuel Kaki website to start saving more on your fuel top-ups.

Read Also: Complete Guide To The Best Credit Card Petrol Discounts In Singapore

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