car taxes and oil ridiculous subsidy

We all know that foreign cars are taxed to protect Proton’s interest in the market and the taxes are pretty expensive. The issue is, we can’t seem to put sniff out the exact amount taxed because the taxation system is sophisticated that it actually takes into consideration the make of the vehicle, capacity, and many other factors. Instead of confusing ourselves even more lets just take a simple car, which can’t be taxed much due to our trade agreements with Japan , and compare how this fuel price hike actually turns out.

As of last month a Toyota Vios would ‘cause a damage’ of about RM 89,000

In the international market, a Toyota Vios is about USD 19,000.

USD 19,000 = RM 62,700 (using the indicative rates of USD 1 = RM 3.30).

That makes Malaysian Vios owners pay an extra RM 26,300.

This RM 26,300 should be cost of operations, profit and tax because the transportation costs have been factored in to the USD 19,000.

RM 26,300 or RM 625 per year translates to a Vios being used for 42.08 years.

I do understand that the RM 625 is a rebate given by the government, but it also means that one has to use the Vios for 42.08 years just to make back the amount paid in taxes for the usage of a foreign car. Would anyone use any kind of car for that long?

Now, with these numbers in front of us, does the subsidy sound like a subsidy or does it sound like a penalty? This just seems to be a heavy increment in our daily cost of living as we are not only charged with high car taxes but also with a drastic increase in fuel price.

With all the numbers listed out, I urge all Malaysians to join me in analyzing the situation. Car taxation is government profit, fuel sales is Petronas’ (GLC - Government Linked Company) profit, which translates into government profit. The government may ridicule us Malaysians by saying look at the world market and fuel price worldwide. Please, we are Malaysians, we fought of the British, had a international port in the early centuries (Malacca), home to a racially mixed nation and WE ARE NOT STUPID!!!

We know the international rates are above the USD 130/barrel. We understand the fact that the fuel prices are increasing worldwide and we also know that major scientists are still contradicting on why this phenomenon is happening. Some blame Bush and his plunders around the world and some blame climate change and there are others who say petroleum ‘wells’ are getting scarce.

Again we go back to numbers. One barrel or crude oil is 159 litres. And approximately 46-47% of a barrel of crude oil will turn out to be the fuel that we use in our vehicles.

46% of 159 = 73.14 litres.

And at the current rate of RM 2.70/litre, this constitutes to RM 197.48 of fuel per barrel of crude oil. This is only 46% of the barrel, mind you. There is another 54% that are still refined and traded in the markets. These products include bitumen, kerosene, and natural gases and so many more.

Using the indicative value of RM 3.30 = USD 1 (it is actually RM3.26 today), we get that a barrel of crude oil produces USD 59.84 worth of fuel. And this makes a balance of USD 70.16 that has not been accounted for. In actual fact, we still pay for this as they are charged in the forms of fuel surcharge by airlines and road taxes for the building of road (because they use the tar/bitumen) and many more excuse charging us but let us just leave all that out of our calculations.

USD 59.84 compared to a barrel of crude oil, which is approximately USD 130, turns out to be 46% of a barrel as well. So this is where I got curios. Where is the subsidy if we are paying 46% of the price of a barrel of crude oil when the production of petrol/barrel of crude oil is still only 46%?

Now, the government has a very ugly predicament in front of them. The taxation of foreign cars to protect Proton has been deemed unfair by these calculations and the price of fuel is currently at world market price.