Three-quarter tank rule could soon include diesel vehicles

SINGAPORE — Diesel-powered vehicles registered in Singapore could soon be subjected to the three-quarter tank rule when going into Malaysia, as part of a slew of proposed changes to the Customs Act.

The Ministry of Finance (MOF) and Singapore Customs are seeking public feedback on the amendments which “seek to support recent policy changes, provide legal clarity on current policies, and improve (the Customs’) operational efficiency”.

The public consultation started on Tuesday (May 9) and will end on June 5. In a joint press release earlier this week, the MOF and Customs noted that diesel duties were restructured in Budget 2017, and the proposed changes to the Act will broaden the definition of “motor fuel” to include diesel, “and any other fuel that may be used to power a means of transport”. 

Under the Act, motor fuel is currently defined as either motor spirit or compressed natural gas (CNG).

The three-quarter tank rule was implemented in 1991 to replace the half-tank rule, which had been in effect for only two years. 

Then-Finance Minister Richard Hu said that the more stringent requirement was necessary amid a widening gap between petrol prices in Malaysia and Singapore, post-Gulf War. The availability of substantially cheaper petrol in Johor would “undermine the conversion to use of unleaded petrol in Singapore and make petrol taxes less effective in restraining car usage and also cause significant loss of revenue”, Mr Hu had said. 

In 2012, the rule was extended to CNG fuel supply tanks, after CNG became a dutiable fuel. Drivers of motor vehicles registered in the Republic could face a fine not exceeding S$500 if they flout the rule.

When contacted by TODAY, the MOF and Customs confirmed that currently, the rule does not apply to diesel-powered vehicles.

Responding to TODAY’s queries, a Customs spokesperson reiterated that Singapore-registered motor vehicles passing through the land checkpoints are “subject to checks on their compliance with the three-quarter tank rule”. The checks include “ascertaining the type of motor fuel powering the vehicle”. 

“Certain characteristics, such as sound of the engine and the fuel cap, are useful features to distinguish a diesel-powered vehicle in the first instance from one which is not,” the spokesperson said. “The registration details of the vehicle can also be called up for further verification if there is ambiguity or dispute.”

Buses and heavy vehicles — those bearing G and Y licence plates — registered in Singapore must be licensed as a commercial vehicle in Malaysia, to be allowed to be driven into Malaysia. 

In Singapore, the number of diesel-powered cars is on the rise. The Straits Times reported in March that there were 10,888 diesel-powered cars as of January, up from 5,976 two years ago.

Motorists TODAY spoke to were generally unaware that the three-quarter tank rule does not apply to diesel-powered vehicles. One of them was Mr Huang Mingde, a 36-year-old civil servant who drives a second-hand Volkswagen Touran.

Mr Huang, who drives into Johor Bahru regularly, said he would ensure he met the requirement whenever he had to cross the Causeway. He had switched from a petrol-fuelled car to a diesel-powered one about two months ago, as a cost-saving measure. 

Mr Huang said that he would need to pay about RM140 (S$45.35) for a full tank of around 55 litres of Euro 5 diesel in Malaysia, about half the price for the same diesel type in Singapore. 

Other amendments to the Act mooted by the authorities include allowing the director-general of the Singapore Customs to exempt parties from submitting manifest data for vessels, airplanes or trains that arrive or depart from Singapore. The one-year time limit to submit claims for refunds for duties, taxes and other charge, could also be extended to five years. This would allow the Customs more time to refund money that is overpaid, or wrongly collected.