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PETALING JAYA: Petrol dealers nationwide are looking at a staggering RM57 million in losses per week if the movement control order (MCO) is extended and pump prices drop yet again.
Petrol Dealers Association president Khairul Annuar Abdul Aziz attributed this to an expected 70% decline in sales, coupled with an expected drop in pump prices of about 15 sen.
He said these factors could cause each of the 3,804 petrol kiosk operators in the country to lose RM10,000 to RM15,000 per week, adding up to a national total of RM57,060,000.
He said petrol dealers have already lost 70% of their earnings since the MCO was put in place.
“Many will have to shut down their kiosks if this persists,” he told theSun in an interview last week.
“We are at an unprecedented time in our history.”
Khairul Annuar said another factor that would cause more losses for the petrol dealers is if they continue to operate more than 12 hours a day.
“We are going to face major losses if we continue to operate for more than 12 hours a day as our sale is too low,” he said.
He said petrol dealers had bought their stock at a higher price and with the reduction in pump prices, they were already feeling the heat.
He said before March 24, the dealers paid RM1.67 per litre of RON95.
“So when the price was lowered to RM1.44 per litre at the pump, we already lost 23 sen for every litre we sold,” he said.
“Right now, we are literally subsidising customers at 23 sen per litre.”
He added this did not take into account the 38 sen drop in the pump price for a litre of RON95 set by the government on March 20.
If the government continued to reduce pump prices, many dealers would eventually be put out of business, he said.
On March 27, the pump price for RON97 dropped by six sen to RM1.68 while that of RON95 also dropped by the same margin to RM1.38 per litre.
The new rates are effective until Friday.
The drop in fuel prices is due to the continuous decline in global crude oil prices and uncertainty caused by the Covid-19 outbreak.
“Everybody is losing. We’ve seen three weeks of price cuts already. The government should not reduce prices any more.”
He said petrol dealers were already counting the days when they would be forced to fold.
Khairul Annuar also proposed that the industry begin looking into the concept of having unmanned petrol kiosks, as has been successfully done in other countries.
He said this would require everyone to use cards for payments.
On another matter, he said petrol dealerships should be listed among the six sectors that were eligible for a 15% discount on electricity bills.
“We are the front-liners, so it is absurd that while we are providing an essential service, we are not getting the same privileges.”
He said power consumption accounts for the second largest expenditure in the business. “Each station spends RM10,000 to RM15,000 per month on electricity usage,” he said.
On March 23, Tenaga Nasional Bhd announced that it would be giving a discount to businesses in the six sectors that it said were most badly affected.
