As if you needed an excuse to buy an M5

Fuel prices in Malaysia are so heavily subsidised that it’s cheaper to drive across the border to Johor and fill up there (at a subsidised 60 US cents/litre) than it is to fill up in Singapore (US$1.57/litre this morning).

Unfortunately, Malaysia is now putting the kibosh on this locational arbitrage, by banning petrol stations within 50km of its borders from selling fuel to foreign-registered cars.

But if your car was high-mileage enough, and the tank was large enough, it’d still be worth the trip… assume you’re driving a 3.5-litre V6 Toyota Camry with a 70-litre fuel tank, which drinks about 9.8 litres/100km (24MPG for American readers, or readers still living in the 17th century). It’d cost you US$110 to fill the tank in Singapore - or you could drive to Malaysia, fill the tank for US$42, burn 10 litres ($6) of fuel driving the 100km round trip to the “free zone”, and you’d still save US$62/tank.

Or, how about a totally awesome 2008 BMW M5 - 18L/100km (just 13 mpg), 70-litre fuel tank? Again, it’d be US$110 to fill it up in Singapore, or $42 in Malaysia; the round trip would cost 18 litres ($10.80), and you’re still US$57/tank ahead. (And with the lax speed limit enforcement in Malaysia - erm, not that I’d know, people just tell me it’s lax, really truly! - you can use the M5’s V10 engine for its intended purpose on the way back.)

Update: JRE has been informed that the petrol arbitrage between Malaysia and Singapore ain’t that simple. It Is A Crime ™ to drive from Singapore to Malaysia with less than three-quarters of a tank of gas, and the fine if you break this law is SGD$400 (about USD300). Apparently they enforce this via random fuel tank testing - and I Am Not Making This Up ™.

Therefore, if you’re driving the previously hypothesised totally awesome BMW M5, and saving US$57 a tank every time you fuel up in Malaysia, you’ll need to make sure you’re checked less often than one trip in every six, otherwise you’ll be looking at a negative expected value. Which would be bad.

JRE apologises for not clarifying this important detail.