The recent announcement that a new weekly fuel ceiling price mechanism will be introduced in Malaysia next month hasn’t gone down well with the Petrol Dealers Association of Malaysia (PDAM). News reports indicate that the association is unhappy with the move, which it said will not benefit consumers in the long run.
Its president Khairul Annuar Abdul Aziz said the association was against the government’s decision to set a ceiling price for fuel, Sin Chew Daily reported. He told the publication that the government did not hold a dialogue with dealers and operators about the matter, and that the association was only informed of the decision before the announcement was made.
He added that he would not be surprised if petrol dealers protest and demonstrate against the new measure, which he said will likely lead to a price war and possibly result in smaller players closing shop because they were not able to compete.
“If the ceiling price is set weekly, large companies with sound financial ability will be able to sell at lower prices over a long period of time, and other companies may not be able to compete at all. Eventually, a handful of large companies will monopolise the market,” he stated.
Khairul said the move will have a significant impact on petrol station operators, China Press reported, as translated by The Sun. He said that profit margins of petrol station operators have reduced in recent years following the government’s decision to remove fuel subsidy, resulting in many closing shop, and the upcoming move will likely see more of this happening.
He added that the new measure may not necessarily benefit consumers, especially in rural areas, as petrol retailers will stick to the ceiling prices announced by the government due to fewer stations and less competition in these places.
“There may only be one petrol station every 10km in the kampung, but there are as many as five of them every 5km in urban areas. Some of them will close shop due to vicious competition if operators are allowed to sell lower than the ceiling prices. The move may be a good measure to allow consumers to know what has been determined by the association, but it will have a negative impact on both consumers and operators in the long run,” Khairul explained.
On Saturday, minister of domestic trade, cooperatives and consumerism (KPDNKK) Datuk Hamzah Zainuddin said that the ceiling price for fuel in the country will be announced weekly – on the Monday or Saturday of each week – starting from April. Fuel retailers can then decide to either follow the ceiling price, or set them lower, he explained.
The PDAM’s current stance is very different than its view on the matter in the past. It has long suggested a move to weekly price updates for fuel, going back as far as December 2015. Back then, it was said that the current monthly system could cause them (fuel retailers) to incur heavy losses, and that weekly price updates (of smaller fluctuations) would not be “too noticeable” for motorists.
It’s good to consumer, in the UK oil price revised daily..so we always searching on the net which one cheaper. hehe
Agreed
Even in our neighbouring countries also the petrol prices are revised daily. Maybe its about time we should use this method and consumer will get the benefits from it.
Hapuskan Kronism dan Monopoli!
What a misleading from PDAM…? How you define a “small player” & WHY it will lead to closing shop…?
Very greedy. They already making so much. Big stations make millions per month. Small stations make nothing less than 6 figure clean profit. At least few hundred thousand ringgit clean profit a month, most small stations earn.
Even this, they are greedy and want to make demands.
i think its our poor manage government who remove subsidy and create this root cause in the first place. Malaysian are suffer and get worse living as a oil producer country
Thousands of people waiting for licence to open station. Like AP, only given to certain people.
Open the licence up to everyone, we also want to compete with lower prices.
william tell me more . oil producer? now we are oil importer. oil we produced is not enuf for our own consumption. so how u define we as oil producer?
You know why the PDAM operators mogok this proposal?
You see,they want senang je lifestyle.Get a few banglas to jaga…off they go holiday with wives/concubines,buy the latest mercedes/Bmw…just drop by once in a while to check on the Banglas whether they r siphoning off fuel or ice cream.
Now,they have to know what the nearest competitors are offering.How? They have to drive around 2-3km radius to check on the cheapest petrol price n try to undercut if possible.
They have to be hands on.Cannot sit in their posh bungalows waiting for cun cun amoi to urut.
Getting more interesting to see these over protected PDAM members survive an all out price war.
Hidup rakyat Malaysia.
How narrow minded you are albert. Back to your flawless imagination about petrol dealer. Not all petrol dealer really making big money, living in bungalows, driving bmw and etc. There are even some small players, meaning their net profit after deducted all cost involved would only reach 6 thousand to 8 thousand per month. and do u know how much it cost those small player to roll their capital per month? roughly 500 thousand to 600 thousand ringgit. I can say only a few are fortunate enough to make a lavish lifestyle from their income of petrol station. So u dont think how they would pay salaries to staffs, electric bills, to feed their families, and so on? it is such a bollocks and selfish view from a mere observer like you without real knowledge about it.
My friend is a petrol station dealer. It only took him 1 year to repay his loans taken out to open up the business. Now after 10 years, he has 6 bungalows, 12 luxury cars, 2 wives, not sure how many concubines though. Imagine earning 6 digit profit every month, suddenly now have to suffice with 5 digit profit or less. How to maintain the 6 bungalows, 12 cars, multiple wives? Enough is enough. No more screwing the rakyat.
IF PDAM members are making noise, pls give up your licence. There are long list of people waiting to take over your licence.
Abdul Latiff,yalor…the blacktint fella talking 3 and 4.
u know,there r thousands waiting for such dealerships…for whatever reasons…u know…it is their present PDAM mindset that is sickening.
This world cannot wait for PDAM crybabies.Only winners take all.
The UK is a technologically advanced and highly industrialised nation unlike Msia.
Daily? The price in Germany is all over the place. During the day it changes perhaps every hour or two, with differences as high as RM 0.50 at a single petrol station during the course of the day. And the prices are also different from station to station, company to company, all within the same town.
Thankfully there are apps that display all the current fuel prices, so we check which one is affordable currently, maybe analyze at what time of the day and what weekday you should expect the lowest prices, etc. It can make a big difference.
Business means competition… whoever cannot fight has to go… that’s the reality…
It would be better to let the smaller petrol dealers to close shop. Let the big players to compete among themselves so that the consumers benefit.
We cannot take care the welfare of a few smaller dealers at the expense of the rakyat.
If they do not have the capital, they should not be in the petrol station business in the first place.
PDAM should make sure lesen is given fairly to everyone in Malaysia.
Should open lesen to anyone who got capability to open station
Let us open up to EVERYONE in Malaysia if certain people cannot do it.
” weekly price updates (of smaller fluctuations) would not be “too noticeable” for motorists.”
What this mean., each week increase 5cent, won’t be notice by motorists. So no one complain. It’s equally increase 20cent in the end month… But increase 20cent in one go will got complain…
What a brilliant idea..
It’s has been done in lots of other countries.. They are still small players there… And usually the small ones offered better price… So how come in Malaysia can’t? Kalau good for consumers saje cepat je nk cantas
PDAM also flip flops.. they were the ones to suggest it in the first place.
Petrol stations close all the time. Even big players like Petronas closes petrol stations. It is the nature of doing business. Don’t cry like a baby when competition is finally coming. Embrace competitions and be creative to retain your customers. Such as clean and well maintained equipments. There are more ways to compete than just setting lower prices.
Big player in this context mean company that own several or more petrol station not big oil company bro.
good, now let see how the petrol dealer deal with this..before this always goyang kaki masuk duit, now have to work harder to attract customer..
U suddenly crave for Cadbury chocolate ,after fasting few days.Where do u go?Giant ,Tesco,99speedmart,Aeon Big.
But u stumble upon a tiny sundry shop near yr home,offering the cheapest price.
How on earth is this tiny shop able to survive and undercut the big boys?
It is not the smallest that will close shop.Sometimes it is the largest(like MAS,Protong)that bleeds and bleeds non stop cos of inflated costs.
If these PDAM members have degrees,I doubt whether they r bought or genuinely earned.
They only know how to cry…and cry like newborn babies.
Shambolically madness leading to insanity.
How about you go to 99speedmart and have a look? Have they closed shop yet? Entah mana belajar berniaga bodoh macam ni.
wake up !!! you are still sleeping. The govt wants to set a ceiling price and encourages all the stations to complete and it leads to price war = lower price to consumers –> SOUNDS REALLY GOOD. Everybody happy. But the reality is, govt runs out of $$, cannot afford to subsidy fuel and yet, they can’t let the fuel price fly. So, they need ceiling price just to make rakyat happy. Govt will say “I have done my job”. Deregulation means govt is giving big corp the control. A corporation’s job is to make a profit. It doesn’t really matter how they make it or what they make as long as it makes a profit. So, it explains why Thailand & Philippine fuel price is higher than us. So, happy for now… later all of you will start cursing !! Once that happen, maybe we can drive to thailand for fuel :P
Look at long term how it will affect consumers.lagi2 luar bandar compared to urban…if the govt set rm3 per liter, but at rural only hv 1 station,for sure the station will maintain the price because it do not have competition..if it affect the rural,the goods(cooking oil,beras,gula,meats,milk, etc) also will increase..if the price reduce to rm2.50,the price of goods still remain like what you see today,no reduction of goods if fuel price decreased. u see at outside country making good but when it start many close down , yes and it succeed but u see the price how expensive and affect the living expenses..please look at long term like you want to choose ur wife..thank you.
‘He said that profit margins of petrol station operators have reduced in recent years following the government’s decision to remove fuel subsidy, resulting in many closing shop’
Seriously, I hardly saw any petrol stations closing shop since the economic downturn in 2008 till now. On the contrary, more and more petrol stations are croping up
I don’t understand the logic of smaller station not being able to compete . Logically a smaller station with less overheads can afford to pass that saving on to consumers . Big stations have staff, electricity, rental, maintenance etc. That they have to keep prices up to run the ststion. Actually the big stations are the ones who will struggle of the smaller ones disrupt them by selling 5 cents cheaper
Charles darwin…the fittest will survive.
What is this Khairul babbling about?
His sample of 5 stations within a 5km radius is a good sample of how much redundancy there is out there. Its similar to the old Proton dealership lineup where you have a whole bunch of them fighting over a already small market.
Have any1 think when there are only 2 petrol station left in urban area following the example above and both of them crowded like hell as when our current petrol price rise? How about when both of them out of supplies? Can they expand or increase the petrol pump? I dont think so. So when shit hit the fan.. what will you guys propose next? All of these cutting, increasing have consequences thay must be address. It cannot be done rushly just to jaga certain people needs…
Unless you’re willing to open a business that only focus on sales during the end of the month (and only IF the next month’s price is significantly upped), go ahead.
I truly believe that the real small timers would wisely choose their business location where there is less competition, compared to big budget bodies that can afford rental/sale of prime land. I’ve been to the US where petrol prices are set by station owners, and you’ll be surprised that small stations in the outskirts with lower fuel prices are the ones having most day-to-day customers compared to larger ones within the city.
I didn’t have the time to go through all the comments so maybe what I am saying is already said. The only thing coming to my mind is that petrol stations will start mixing fuel with other substances eg. kerosene or water to lower their price in comparison to other stations. We will stupidly line up at their station first then later find ourselves lining up to change our fuel pump or filter at least. I think I will go to the more expensive station once this nightmare starts, although expensive doesn’t mean good :(. OMG once upon a time Malaysia was so simple.
More like wont benefit gomen..thats why dont want this move.. price war good for customers..
I dont mind driving 10km for cheaper fuel
competition wont be strong as they will tend to stick to max profit ie the ceiling price, especially those with steady flow of customer, while those further bit might adjust bit but by how much, just less 1 sen 2 sen or even say 10sen, would it matter much to a car?
average 1 tank 50 liters, u pump 40l u get 4rm saving, i would rather the price being control and lowered down. coz based on so called open market price, there is minimum and maximum (ceiling) price…
ask a driver, would he travel additional km to save max rm4 per tank? risking running out of petrol along the way?
smaller dealers when closed better run laundry shop la….ugut mogok konon..phui…
What tutup kedai? Not everyone can apply to operate or run a petrol station. And what is a healthy competition so that consumers can decide on their own. Low tank emergency just fill wherever they want. Malaysian will definitely welcome those big sign boards showing current prices by the roadside.
Since free trade pact and open market not implemented yet or may never happens, otherwise you will see 7eleven, mydin, giant opens and operates gas stations like mushroom
what a spoilt brat.. incompetent then close shop la, that’s the way of doing business…
Petrol business is different from other type of businesses. You cannot control the petrol delivery ,buying quantity and price ,you cannot set the selling price,you cannot set your margin.Everything is force down your throat to swallow.Only those in the businesses understand the issue.It is a business with big capital and razor thin margin with very high risk.
There’s always secondary incomes from general store aka mini mart, car wash polish&wax centre, and fast food outlet within a gas station.
The fast food and other does not belong to the petrol stn dealer only the mart
Why do “protected traders” fear open competition? Time to let market forces dictate pricing.
The mere mention of ‘competition’ scares PDAM off.
How can ??
It is PDAM’s birthright.
As always, against competition. Always looking for guaranteed profit through forced laws and spoonfeeding. The moment anything suggest remotely about competition, they threaten close shop this and that.
So why is that for petrol stations they will close down if there’s competition? Why not Giant, Tesco, Aeon, Mydin for that matter ever close shop since they determine the cheaper price to attract customers?
Do you aeon group already closed down many of their outlet in Klang Valley?
who cares, all this while u people made ton of money and now its out time o save some
Out of the contrary actually. In the UK and Ire, the petrol prices are a lot cheaper in the rural areas. And some of them are independent. So, I don’t have any idea what this guy is talking about.
its funny how we should pay premium price even though we are oil producer countries. no matter what government implement and government stupid tricks, u change us to become worst instead of a better living.
OPEC dictates the market price.
Waze has a feature that shows fuel stations and their prices. This is good for the consumer. I’m looking forward to using this feature in Malaysia. I used this feature when I was driving in New Zealand.
In New Zealand however, petrol prices are cheaper in the urban area compared to rural. I foresee that this could happen in Malaysia where more competition would drive the price down whereas, in the rural area where there is less competition, they will go for the ceiling price.
What will be the floor and ceiling price? Huge gap?
A handful of players is not a monopoly. Any more then two player is a healthy market.
people are comparing usa, uk, ireland, new zealand…
WAKEUP !!how much nzd vs usd, pounds vs usd and rm vs usd. what is the price of a brand new honda civic fully loaded in usa –> usd 20,000. Don’t even try to convert. Min wages in califoria = usd 10.50/hour.
Our min wages ? RM4.81/hour and CKD honda civic rm120,000 ?
subsidy is mandatory from govt.since theytax every cars!!
Adoi, think outside the box lah, give the best service at petrol station, put good price, attract people to come..PDAM members already earn so much profit, why dont u guys give it back to the customers..Our system now only exist to feed petrol pumps owner, how many petrol pumps owner u guys know drive cheap Proton or Perodua cars?
Dont trust this PDAM. Last time when the price went down they also said the same thing.
Once the competitors are gone, monopoly comes, tho ceiling price is still set, but expect lousier services at the station since theres no more competition, n no motivation to remain competitive
lots haters and ignorant keyboard warriors here,blanket judgments, lack of critical thinking ,must be our education system.
Initially this strategy may be beneficial for the consumer, in the long run, this will probably wipe out the ‘small stations’ in urban areas, because the ‘big stations’ will sustain themselves with a price war to wipe out the smaller players. Then, prices will rise !!! As it is, in some areas of Penang the distance from each station can be far (Tanjung Bungah to Teluk Bahang). Also, like it is in many countries, petrol stations should display their prices on the main sign boards, so motorists don’t waste time to check the prices.