Press Digest - Weekly announcement of petrol price beneficial for consumers not for dealers

PETALING JAYA: The government's decision to announce fuel prices weekly from next month will lead to vicious competition that will not benefit consumers in the long run, said Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz.
He pointed out that the prices may fluctuate two to three sen a litre, which is good for consumers in the short term, but will lead to a price war among kiosk operators.
He warned that the smaller players would lose out and close shop in such a vicious competition, resulting in the domination of the market by big players.
Should this happen, the consumer will be the eventual loser, he said.
Khairul said announcing the fuel prices weekly will not affect consumers much but not so for petrol station operators, China Press reported.
"We all know that the profit margins of petrol station operators have reduced in recent years following the government's decision to remove fuel subsidy with the introduction of the managed float system, under which the government determines the prices.
"This, coupled with the raise in electricity tariffs and the minimum wage policy, had caused many operators to close shop," he said.
He believed the new measure may not necessarily benefit kampung consumers as petrol retailers will stick to the ceiling prices announced by the government due to fewer stations and less competition there.
"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 (weekly announcement of fuel prices) 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."