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Petrol dealers in a tight spot

SHAH ALAM – Petrol dealers say they have to resort to severe cost-cutting measures if the government persists with its weekly fuel price float, which goes into effect on Jan 1.

Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said this includes letting go of employees as the minimum wage increase will also kick in that day and cutting stations open hours to 18 hours instead of 24 hours.

He said PDAM was against the weekly pricing mechanism as dealers would be exposed to the risks of oil price fluctuations.

“We are not against the price drop but the quantum is very big. As we don’t control our own stock, if prices go down we are left with more stock at midnight. Even if prices go up, the gain is not a lot,” said Khairul Annuar.

He said dealers had lost RM61mil in December 2014 and another RM30mil in March 2017 when the monthly and then weekly floats were introduced respectively.

“The current disparity is RM0.30 per litre for RON 95, which means an estimated Rm42mil on Jan 1,” he said.

PDAM also wants the government to increase the commission for dealers from RM0.12 to RM0.15 per litre for both diesel and petrol, especially now that diesel prices are almost on par with RON95.

“To be honest, even with RM0.12 per litre for commission, this is not really the sum we are getting as we have to deduct for oil licence fees to the oil companies, merchant discount rate for credit card payers, workers’ wages and utilities, and insurance and council fees,” he said.

Perak Petrol Dealers Association chairman Kenneth Lee said the price mechanism changes had already caused many petrol dealers to quit the industry and more were expected to surrender their licences once the weekly float comes into effect next week.

“About 50 petrol dealers quit in 2017 and these are just the ones we know about, while some sold or transferred their business to others as they couldn’t survive,” Lee said.

PDAM’s management committee said besides the cost cutting measures, they would march to the Domestic Trade and Consumer Affairs Ministry if there were no options left.

The PDAM plans to hand a petition to Prime Minister Tun Dr Mahathir Mohamad containing the industry’s grievances and recommendations at Parti Pribumi Bersatu Malaysia’s annual general meeting today.

Melaka dealer David Wu said even if the price drop was minimum, this was akin to “death by a thousand cuts” and postponing inevitable losses.

“It might be better to set up a fund to stabilise the country’s oil prices, rather than trying to change oil prices weekly, because hawkers and other businesses are not reducing their prices even when oil prices go down each week,” Wu said.

Source: The Star

There’ll be enough fuel on Jan 1 – KPDNHEP

KUALA LUMPUR: Some 2,300 enforcement officers will ensure that come Jan 1, there will be enough fuel in the country’s 3,700 petrol stations when the weekly price float kicks in.

Domestic Trade and Consumer Affairs Ministry’s special operations branch deputy director Datuk Iskandar Halim Sulaiman said there were some 3,700 stations to monitor.

“We’ve issued orders to about 2,300 ministry enforcement officers to start the operation and ensure that supply for petrol and diesel is sufficient,” said Iskandar, who had earlier accompanied his officers for checks on stations along the Kuala Lumpur-Seremban Highway.

This follows a Dec 25 statement by Bumiputera Petrol Dealers Association president Datuk Abu Samah Bachik that petrol stations were expected to go “dry” by that date.

Iskandar said for the ministry, this was a “dangerous statement” which might cause panic among consumers as many people would be travelling on Jan 1 with school and work starting the next day.

“Petrol and diesel are scheduled items under the Control of Supplies Act as well as important commodities to the country.

“If there’s any shortage, there will be chaos,” he said, adding that as licensees, petrol station operators should not appear to blackmail or issue statements which caused unease among consumers.

Iskandar also warned that failure to ensure sufficient fuel supply on their licensed premises or closing the stations or halting sales could see the operators slapped with a first-time fine of RM1mil under the Control of Supplies Regulations.

A second offence could see a RM3mil fine as well as the possibility of losing one’s licence, he said.

The ministry, said Iskandar, had opened 81 investigation papers against petrol station operators before over petty offences.

“We don’t want to add to this number.

“So, I’m calling on the station operators to make sure they don’t go dry,” he said, adding that order notices had been sent out.

“We’ve sent out about two-thirds of the notices. Even rural petrol stations will get a notice.

“Many have acknowledged receiving the notice so they can’t say they aren’t aware. It’s in their licence conditions too,” he said.

Source: The Star