3,500 petrol stations suffered RM181 million in losses after diesel subsidy rationalisation – association

A total of 3,500 petrol stations in Peninsular Malaysia have sustained losses amounting to RM181 million since the floating of diesel fuel pricing in June this year, reported The Star.

According to Bumiputera Petrol Station Operators Association of Malaysia (Bumipeda) honorary secretary Datin Hanny Julia Haron, the subsidy rationalisation for diesel fuel in Peninsular Malaysia had faced operators with a severe economic challenge.

“About 98% of petrol stations are reportedly suffering losses from petrol and diesel sales, forcing many to shift their focus to convenience store operations in a bid to offset declining fuel revenues,” Hanny Julia said, adding that the current trend could lead to higher unemployment rates and reduced government revenues from taxes and levies.

Closures of stations, or scaled-down operations would also disrupt local economies, which will affect businesses like workshops and other retail outlets, she added.

“The APM must be aligned with the national annual budget to reflect today’s economic realities,” stating her view that the automatic pricing mechanism (APM), which has been in place since 1983, needs to be reviewed. Hanny Julia also raised concerns for confusion and instability due to dual pricing for fuels within the same storage tank, as operators are forced to buy fuel at high prices but sell it at lower prices.

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