Going beyond hybridsPOSTED BY admin ON 31 March 2012
They may be hot in the minds of Malaysians, policy makers included, but there is more to fuel savings and impact on the environment than just hybrids.
Man is by nature reactive. When energy prices are low, government put off the difficult task of pushing through unpopular but critically important national energy policies.
Consumers and companies delay investments in energy efficient appliances and solutions when energy is cheap and the returns on their investment is long.
At the end of last week Brent crude oil price was trading at US$124 (RM382) a barrel, with further increases expected in the coming months.
A March 14 report by Goldman Sachs said,”We expect fundamentals will continue to tighten during 2012,” adding that low inventories and spare capacity will push oil price towards the $130 mark.
China is the world’s second largest oil consumer after the US. Like Malaysia, China practiced price control mechanism for its transport fuel. Within the last six weeks, China has raised transport fuel prices twice.
China’s Euro5 quality RON93 petrol now retails for RMB 8.33 per litre (RM4.05), RON 97 at RMB 8.87 (RM4.30) and RON98 at RMB 9.42 (RM4.58). Diesel is retailing at RMB 8.31 (RM4.04).
China’s transport fuel prices is set based on a 22- day moving average of Brent, Dubai and Cinta crudes. Price are increased if there is a gain of 4 percent or more from the last revision.
The Indonesian government is expecting social unrest come April1 when it raises fuel prices. There is also a shortage of diesel in some parts of Indonesia as smugglers are taking advantage of the situation by hording diesel to re-sell them when prices are raised.
While the Malaysian government’s decision to exempt import and excise duties on hybrid cars is to be applauded, hybrid cars still remain out of reach to majority of looking to lower their fuel expenditure.
The current tax structure assumes all hybrids are the same, which is not true. Some mild hybrids have a fuel economy that is still lower than many benchmark European clean diesels and the new generation of ultra-efficient petrol engines.
In Thailand, eco-car incentives are given to cars that meet a minimum fuel consumption of 20 km/litre.
A targeted policy to promote fuel efficient cars, irrespective of the technological pathways used by the manufacturers, will see a new crop of affordable fuel efficient cars available to consumers.
Malaysia’s current automotive policy should move beyond just elitist hybrids and focus on the bigger pictureof lowering our country’s dependence on oil.
VW and Mazda offer powertrain solutions that don’t cost as much as a hybrid, but yet offer similarly good fuel economy without sacrificing performance.
In Britain, a VW Polo BlueMotion TDI ismore than£500 (about RM2,400)cheaper than the cheapest hybrid but gives nearly 30 per cent better fuel economy.
In Japan, a Mazda Demio SkyActiv is nearly 200,000 yen (about RM7,500) cheaper than the cheapest hybrid on sale and yet it offers the same fuel economy.
However, Malaysia’s current policy puts these cars at a disadvantage. VW’s TDI engines are ill suited for use in Malaysia because of poor diesel quality. Mazda’s SkyActiv is a cheaper alternative compared to a hybrid but it doesn’t enjoy any of the tax exemption benefits currently offered to hybrids below 2,000cc.
This article first appeared in March-28’s edition of CBT Quarterly Review.