Delay Fuel Subsidy Reform Gas Stations Group Tells Govt Over Financial Concerns

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The largest petrol station association has called for a postponement of the RON95 subsidy rationalisation plan, citing unresolved margin issues that could force operators into losses.
ADSThe Petroleum Dealers Association of Malaysia (PDAM), which represents over 4,000 petrol stations, said the policy should be delayed until two critical concerns are addressed.
Its primary grievance centres on dealer margins (automatic pricing mechanism), which the association said has remained frozen since 2019 and no longer reflects current operating costs.
Under the proposed subsidy rationalisation, PDAM warned that small and medium-volume station operators will face losses "from the very first day" of implementation.
MDR charges
A second concern involves merchant discount rate (MDR) charges.
"MDR charges are calculated as a percentage of the sale price, while dealers' commissions are based on litres sold.
“As pump prices increase under RON95 subsidy rationalisation, MDR rises accordingly, but dealer commissions remain static, resulting in further erosion of margins," PDAM president Khairul Annuar Abdul Aziz said in a statement today.
The association has garnered unprecedented industry support for its position, he said, collecting over 2,300 verified signatures on a petition.
This represents more than 60 percent of Malaysia's petrol stations and over 70 percent of major branded outlets, including Petronas, Shell, Petron, Caltex, and BHPetrol stations, he added.
“For the first time, local brands such as Five Petroleum, BuraqOil, and SmartStream also participated.
“This represents the highest level of support in PDAM’s history and is clear evidence that these concerns are widely shared, cutting across brands and station categories."
ADSMeeting with PM request
Despite the scale of concern, PDAM claimed that it has been unable to secure a meeting with Prime Minister Anwar Ibrahim for the past two years.
“We believe that only through direct leadership from the prime minister, can a sustainable and balanced resolution be achieved - one that ensures the continuity of local dealer operations and the security of fuel supply to the public," Khairul added.
PM Anwar IbrahimThe group’s statement also addressed claims made by another organisation on June 1, which alleged that bumiputera fuel retailers had not been consulted about the subsidy changes.
"For public clarity, PDAM is the sole association that has been actively and consistently involved in official engagement sessions with the Domestic Trade and Cost of Living Ministry and the Finance Ministry, concerning the implementation of RON95 subsidy rationalisation.
"PDAM has been formally recognised by the government as the main representative body for petrol station operators across Malaysia.
“The claim that there has been no consultation with station operators is inaccurate and misleading to the public," Khairul said.
He added that as an umbrella organisation, PDAM represents eight petroleum dealer associations across Malaysia.
"We urge all stakeholders to put aside differences and unite behind a common objective - to support a fair and sustainable targeted subsidy system without neglecting the economic realities faced at the operational level," Khairul said.
Last month, Finance Minister II Amir Hamzah Azizan affirmed that the rationalisation of RON95 fuel subsidies will be implemented in the second half of this year. - Mkini

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