The introduction of weekly fuel price adjustments may have been easier on consumers’ pockets, but it’s apparently become a burden on petrol station operators, with The Star reporting on business owners ceasing their operations as a result.
Each of the fuel retail brands has seen between 30 to 40 stations close down since the implementation of the monthly price adjustment scheme in December 2014, according to Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar.
“More so in recent weeks following the weekly price change mechanism starting April 1. We are concerned that more dealers will give up their dealership if the trend continues.” he told the publication, adding that as a representative of Shell, Petronas, BHP, Caltex and Petron’s executive committees, he realised that station operators in Sabah and Sarawak – where traffic volume is lower – were among those affected.
“This is especially in areas with too many stations within the same vicinity, such as in Johor Bahru and in rural areas where their sale is low and dealers don’t have petrol mart or convenient store income to subsidise the weekly loss,” he said.
Khairul added that dealers may have to cut jobs to reduce their monthly overhead expenses, in order to cushion their losses. “If cost continues to be an issue, 14,000 people will lose their jobs as we will go for full self-service,” he said, referring to the amount of pump attendants that are currently being employed across the 3,500 stations nationwide, out of a total of 50,000 employees.
The reason operators were losing money, said Khairul, was because they needed to sell their fuel stock at a loss due to a drop in ceiling price, adding that they needed more time to clear their stock at the previous prices. “Carrying weekly stock means a total loss for the dealers if they cannot clear it quickly before the new price is announced.” he said.
Khairul noted that this was especially true for RON 97 and diesel fuels, which have high supply but low demand. “For RON 95 petrol, with a stock balance of three to five days on the midnight the weekly price change is announced, dealers will have to sell with zero margin for three to five days of the week.
“A drop of 10 sen will wipe out all margin for petrol sales for three to five days and dealers have to sacrifice all their margin for the Government’s weekly ceiling price mechanism,” he said. An estimate by PDAM put the losses dealers were bearing every week at between RM3,000 and RM5,000 – a particularly high figure considering some stations are only earning around RM5,000 a month.
Khairul called the weekly price adjustments “unhealthy,” saying that dealers want a 5 sen limit in adjustments the week before, in order to stabilise the market and protect dealers from both gains and losses. The steeply rising overhead costs since commissions to station operators were last revised in 2008 meant that it’s due time for a review on the agreement as well, he added.
“Diesel typically sells less compared to petrol but stock is high and gross margin is only 7 sen. Therefore, a drop of 10 sen hits us hard and this gives more reason to review the margin for all petroleum products,” Khairul said.
In response, domestic trade, cooperatives and consumerism (KPDNKK) minister Datuk Seri Hamzah Zainudin urged station operators to look for other sources of income to complement the sale of fuels, in order to generate a larger profit, according to Bernama.
“It is up to the petrol station operators to find alternatives to make more profits and not only depend on profit from the sale of fuels. It is their own creativity to do something by operating a petrol station not merely for petrol but also to carry out other business activities.
“For example, a petrol station in my village in Perak is thriving because it also has other businesses such as a cafe, dhoby, car wash and numerous other services,” he told reporters, adding that the government wanted consumers to enjoy fuel prices at the current market rate.
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Lemak betol peniaga petrol kt malaysia ni. nak berniaga tapi tak bole rugi, kene untung je sentiasa. kalau tak boleh tanggung rugi banyak, tutup je stesen tu. adat la berniaga ada rugi ada untung. PDAM pon satu, ini free market pandai2 la cari sumber income lain. Sama macam syarikat konsesi tol, asal rugi je minta pampasan pada kerajaan, kerajaan pon bayar. woi bestnya buka bisnes kat malaysia macam ni.bisnes yg rugi xperlu bimbang
Bunch of greedy fools. The last 20 years, each of them was making clean profit of not less than RM100k per month. The bigger stations was making clean profits of RM1 mil per month.
And the best part, some individuals had even up to 15 stations under their names.
This is the same like the AP system. Give to a selected few, and they don’t know how to run a business. During good times, never saved. All jolly and enjoy the money.
In any business, one should save for a rainy day up to even 20 years planning.
And the greedy station owners, dared to ask Government for compensation when fuel price go down. The forgot to tell that whenever fuel went up, they each reaped hundreds of thousands clean profit.
My suggestion is…open to all people in Malaysia. Open the licences to ALL 30 million Malaysians and not just selected few. Let capable people handle the business.
Free competition results in loss to small business. I suggest the Gov to gip more protection to secure the jobs for our local pipu
no complaints when good times
I dun hear pipu complaint when they are given BR1M?
Kerajaan sepatutnya mengambil langkah yang lebih proaktif dengan mengambil pandangan daripada pelbagai pihak termasuk pengusaha stesen, sebelum melaksanakan kaedah pengapungan terkawal secara mingguan bagi penetapan harga minyak.
Bukan diaorg hari tu ke yg mintak harga minyak revised weekly? Sekarang bising apehal?
Blame the Oil companies for the petrol station owners distress. The government should force the oil companies to compensate the station owners for losses if the price changes cause them to lose money. Not easy making money from petrol stations since the big oil companies really squeeze the owners.
Apa kata saya cadangkan petrol station stop selling and keep their stock sampai harga naik balik or atleast jual ikut mereka beli sebab mereka yg bayar beli stock minyak bukan motorist….lets them naik LRT/MRT or basikal…
The weekly price changes hasn’t even been implemented for 2 months and fuel stations are already closing because cannot absorb the loss? Yeah, that doesn’t sound suspicious at all!
When fuel price go up 30 cents, do you return your excess profits back to consumer?
Khairul Annuar and your gang, stop complaining, focus on your business.
You mean now they must learn how to run a business? No more 100% guaranteed profit?
Oh man.. how can they survive…
“weekly fuel price adjustment”, mean it can be increase or decrease… What if price increase and they can clear their old “stock” with more margin?..
Complaint only, adapt or die
Consumers just like to complaint. When harga turn, they dun puji kerajaaan
Puji apa? When they naik, other businesses also busy naik also. Now turun, those still remain unchanged. If they no naik in the first place, those businesses no excuse to naik.
Other businesses pun salah kerajaan?
Solution. Let petrol station operators fix their own price. If they can’t survive then they should not be in business.
good idea but quite risky at the same time. since petrol is a necessity..PDAM will sky rocket the price..u want petrol u pay. shell..petronas more or less the same. i bet rakyat will complaint too.
Here we go again with the petrol station dealears….
Here we go again with the dealers….
Hmm… to bash (sapot dealers/business) or not to bash (sapot consumers)? Choices, choices, choices….
Most of us are consumers hence we sure will support consumers. Only cronies support their own.
If price increase they made more money? Why complaint?
Untung pun can’t cover the lose
What else is unhealthy? Having cartels like PDAM is unhealthy! We want free market but there’s always all sort of intervention to stop it. There’s no genuine free market here in Malaysia.
itu susah, ini susah… apa lg lu mau?
Belilah Proton, jimat minyak
Ini john mkn vavi byk….
Apa tu vavi?
Before this many times fuel price goes up all the dealers keep quiet. Now price down make noise. Don’t worry la…next week price will be up again laaa…Minimum 5 cents increase…
Well petrol station operators need to wake up and realise that they are in the trading business, providing services to the end consumer,just like groceries, laundramat etc; they need to take some effort to diversify their business and have additional services like ATM, service centre, deli etc. They cant be expected to be sheltered and spoon fed forever..seriously if they find the going too tough and they are losing money..they should step aside and let someone else with better acumen to run the concern..lamenting and venting grouses when the going get tough is pointless…Bear in mind, they are many more of Rakyat, regardless of race are finding ways and means to stretch their dollar, by working two jobs, spending less etc…so makes these petrol station operators so special….that they need tongkat as well…In all Fairness, when the government was subsidising most of the fuel cost, many greedy petrol station operators were selling subsidies diesel fuels to neighboring syndicates, and were raking in big bucks, at the expense of the government and rakyat..they can expect to have their cake and eat it indefinitely…..my 2 cents
First of all. This is not a free market system like other business where the business have the choice to choose suppliers and the freedom to choice the price of products they selling.
If every week the fluctuations will wipe their profit margin or even loss, it is not making business sense to continue.
Others services such as groceries, car wash, will not be able to cover the losses, because the difference if size is huge.
Even if the petrol price increases, it will not benefits the dealers so much, because suddenly people will isi minyak penuh, and the stock will old price will finish faster if compared to price reduce.
Hence, the solution for this is to create a consignment system in which the big o &g company to bear the risk of frequent price changes. This will ensure the continuity of petrol dealers and petrol dealers can focused on improving their services as petrol station are usually the centre of place for multiple services for an area.
Let the dealers or principals decide to kick in the adjusted price within the week so that the kiosks can minimise the loss if the fuel price is going downwards. Also a good practice on proper inventory planning by the dealers is required too!
Is it the pricing mechanism or more likely that fuel prices have come down by 50% or more?.
Kerja lagi kuat #5kerja
Few weeks ago when the price was going up and up, it was all quiet from PDAM as they rake in profits. Now when going down and down, keluar article kat surat khabar. Kawan… lots of us are businessman, we save during good times to pay for the bad times which always comes. When government changed the game, we need to change to accommodate. Anyway when I pump petrol, no one touches my car. I prefer to do it myself.
In March 2017, Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar said he welcome weekly changes. The association has long suggested a move to weekly price updates for fuel, going back as far as December 2015.
Now he change story already. He is not fit to be the president as he doesn’t know what he is talking about.
Rule no. 1, never trust any associations’ complain or talk. all cannot be trusted be it from taxi, mamak or petrol.
The only person u can trust is our PM
Dats so true. U finally seen the light.
The light you seen is the front of an oncoming train.
Dat wan kenot animo la kwan. Dah too long in the tooth. It’s time for a transfusion, out with the old in with the new. Hey, it’s 2017, not 1957, get with the times
Agree with U. We should trust him 2 screw us again U mean.
Simple, tutup kedai lah and do other business if you think operating petrol station is not profitable.
I u put/control ceiling and floor price for a important items,..this is the kind of problem may surface…
As seen in the petrol stations mostly all the workers are not malaysians but bangladeshi and perhaps pakistani nationality in Malaysia on work permits.
So how many malaysians workers really lose their jobs .
or foreigners losing their jobs?
What is the statistics ratio of malaysian workers compare to foreign workers??
Bunch of cry babies
Boss kawan manyak kesian, bisnis minyak rugi. makan takda selera, gaji kawan lambat.
What we need is a pure free market. Let the petrol station owners set their own price. Maybe the government can set a ceiling price, and more importantly, ensure there is no cartel to set up the price. Each station can sell at a price suitable for their condition; they can sell at a higher price if they want to but don’t blame anybody else if someone else is selling at a lower price and getting more customers. Also, they can set a different price for full service and self-service if there is demand for it. This has long been done in many other countries in the world without much problem.
Enough lah….consumer no longer stupid like last time.If cannot compete and survive,dont get into business line..end of story.PDAM will end up like taxi association like last time. This is one topic gomen must play smart which is to favor the people instead of their crony….that is if they want to still rule this nation next year lah.
Some player cannot survive because they shouldnt exist in the first place,all these player’s station are owned by politically linked individual and those whom does not know how to run business.
Demmit, although petrol dealers have earn handsome profit before this, the current system will hurt petrol dealers with the fluctuations of oil. There is must be a consignment system to move the risk of oil price changes to the big o&g companies.
hahahah, stupid petrol station business men mentality. All based on tongkat.
When rugi in business, cry like big babies, ask this and that, for protection la, control price, etc.
When made tonnes of profit from malaysian, but still want to squeeze money. Drive Merc, splurging on luxuries and go oversea holidays without a care of the poor rakyat.
No wonder so many business in the country folded….
For the petrol station owners….do you remember what our minister said last time during trying time??
“Ubah gaya hidup”
When hike up keep quite
Dulu ada orang tolong wipe screen, pam minyak etc… sekarang habuk pun tarak. Sendiri swipe card, sendiri pam, sendiri tambah air, sendiri jugak jalan ke kaunter bila tarak resit. Apa benda overhead cost yg si penipu ni yg katakan? Apa lagi you mau?
I am wondering, don’t the station owners make a fixed profit for every litre of petrol/diesel? So why is it that they make a loss when prices go down as long as they sell the same volume of fuel?
https://klse.i3investor.com/blogs/kianweiaritcles/114976.jsp
Nope! They buy oil at current market rate, fluctuations of oil price will hurt cash flows, since the terms are in cash.
Diesel and Ron 97 sale less but keep higher stock? Where they learned such idiot business practices?
The order size is predetermined by the o&g company. Need to pay Cash summore. The fluctuations should be borne by the o&g companies via consignment system. If more and more petrol dealer close shop, the consumer will hurt because less station in the market.
It’s easy to comment when it is not your business nor livelihood
This is the problem with franchise dealership, being squeezed by powerful big companies..most comments here sounds very hateful, wish msians have bttr critical thinking .