Press Digest - Weekly oil price adjustment may cause petrol stations to close down

PETALING JAYA: While motorists welcomed news of yet another drop in fuel prices, Petrol Dealers Association of Malaysia president Datuk Khairul Anwar is worried that a series of price reductions may force some petrol stations to close shop.
This is because each time the price is adjusted downwards, petrol stations have to sell whatever is left of their stock, which was bought at higher price, at a loss, he explained.
He pointed out that it is impossible for dealers to clear their stock within days it is delivered: meaning there is always leftover stock when fuel prices are adjusted every Thursday.
He said it usually took four to five days for dealers to clear their stock of RON95 and more than a week for RON97.
Speaking to China Press on Wednesday when the Domestic Trade, Cooperatives and Consumerism Ministry announced the third fuel price reduction in a row, Khairul said dealers had to sell their old stock at a loss for the third time in as many weeks.
If this trend continues, he lamented, many petrol stations may have to close down.
A dealer, who did not want to be named, said the going is getting increasingly tough for petrol stations, especially those with lower turnover, now that the fuel prices keep dropping and the global crude oil prices remain unstable.
He disclosed that the gross profit margin for dealers is maintained at around 10 sen a litre.
"When the price drops, dealers have to bear the difference between the (stock's) purchase price and the new pump price."
The dealer also lamented the earlier-than-agreed "announcements" of the weekly price updates.
"The ministry had said before that the update is to be announced at 8pm every Wednesday, but now news of the new prices is already being circulated by noon.
"If the prices are going up, motorists rush to fill up their tanks, causing our stock to go down; otherwise, they will hold on until the pump prices are adjusted before filling up (putting us at a disadvantage)."