PETALING JAYA: Some 300 petrol dealers have reportedly abandoned the business since the implementation of the weekly fuel price mechanism due to rifts with oil companies on stock management and a sizeable drop in price.
Petroleum Dealers Association Malaysia president Khairul Anwar Abdul Aziz told The Malaysian Reserve that the number of petrol stations had dropped from 3,500 nationwide in 2014 to 3,200 today.
He added that the drop in price was similar to that experienced in December 2015 and January 2016, when the monthly float system was first implemented.
Many dealers had also left the industry then, he said, as they had lost a large amount of working capital.
“In general, the weekly mechanism has impacted dealers negatively.
“The industry faced maximum losses. The timing could have been managed better, for when it was implemented there was a huge gap between market price and pump price, which resulted in the huge drop,” he was quoted as saying.
The weekly fuel pricing mechanism came into effect on March 29 this year. Prices of petrol and diesel had been placed on a managed monthly float system since Dec 1, 2014, following the removal of fuel subsidies.
Khairul Anwar said the government should stop changing the mechanism and leave it at either weekly or monthly.
He also said the industry trend had been upwards, which meant a drop in volume for dealers.
“We make less commission as we earn in terms of sen per litre. Besides that, credit card usage has gone up and we absorb higher credit card charges on behalf of consumers, which is around 1% of pump price.
“Moreover, there is capital cost increase. All of which had impacted us negatively, as it has been for our customers,” he said in the report. -FMT
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