Here’s a very simple and quick calculation based on the assumption that there’s about 100,000 drivers out there like me. I think that’s a very conservative number. But let’s stick to that number for now.

Each time I go fill up my car, 35 litres of fuel goes into it. I fill up roughly about 6 times in a month. Another conservative figure. This means that in one month, I would have purchased 210 litres of RON95 fuel. Assuming 100,000 people like me, we would have consumed 21,000,000 Litres of fuel a month.

Let’s see that in point form :

• 35 Litres per fill up
• 6 fill ups per month
• 210 Litres of fuel per month per user
• 100,000 users
• 21,000,000 Litres per month for all 100k users.

From tomorrow, there will be a reduction in subsidy of RON95 amounting to RM0.05 per litre.

That’s RM1.05 Million saved each month. Or RM12.6 Million a year.

Wow…

According to the Malaysia Automotive Association, we have a total of 3,749,782 vehicles registered in Malaysia from 1980 till March 2010. [source]. Ok la.. assuming half of those vehicles have been scrapped due to age, damaged or rendered not road-worthy, there’s still 1,874,891 vehicles on the road today. So my estimation of 100,000 users is indeed extremely conservative.

But just for information purposes, let’s use our newly found figure and take out 1,000,000 vehicles out of the equation. So that we can equal out those who drives less and thus uses less fuel. That leaves us 874,891 users on the road. So feed that back into my little simple equation and you get :

Savings from subsidy per month : RM 9,186,355.50

Saving from subsidy per year : RM 110,236,266.00

WOW!! Now that’s a lot of money.

Let’s see if these savings are put to good use.

Again, I am not finance guy. Neither am I an economist. I am in no way qualified to actually do any calculations like this. The above is a very simple layman calculations based on whatever I remember from my Form 5 Math classes.

I may have even misinterpreted the tabulated figures on the MAA website. HAHAHA.  Maybe someone out there can tabulate a better and more accurate figure.

 

Cheerio!!

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