Petrol Dealers Warn Of Petrol Diesel Running Dry On Jan 1


KUALA LUMPUR: Motorists have been warned to brace themselves for pumps running dry from Jan 1 in view of lower prices to be announced by the government
Abu Samah Bachik, president of the Bumiputera Petrol Dealers Association of Malaysia (Bumipeda), told Berita Harian that most operators will refuse to refill their fuel reserve tanks at the end of the month in view of the impending lower prices
He said if they restock at the end of the month at a high price, they will lose out a lot when they are forced to sell them at a lower rate from Jan 1
“If the government had used the monthly flotation price system earlier, we can still operate with profit enough to bear these operational costs,” he said
His association represents about 2,700 Bumiputera petrol station operators
The government intends to bring back the weekly float system to fix prices according to prevailing oil prices
Abu Samah admitted that the refusal to restock may be seen as a form of protest, but said it was necessary to ensure petrol station operators continued to stay in business
He said before making the decision, the government should have consulted petrol station operators to hear their views so that a win-win solution can be achieved
Abu Samah suggested that the best way to solve this issue would be to use a monthly fuel price mechanism instead as this will help petrol station operators manage their reserves better
Finance Minister Lim Guan Eng yesterday announced that the retail price of petroleum products, including RON95 petrol, will be cheaper from Jan 1 onwards to take advantage of lower global oil prices
He also announced that the government would be returning to a weekly float for the RON95 petrol price from Jan 1 onwards
He said if global oil prices were to increase drastically, the prices would be limited to RM2.20 per litre for RON95 and RM2.18 for diesel
Lim said the government currently sets fuel prices on a monthly average basis, which will only be reflected the following month
He said the price of petrol is determined based on the average cost of processed petroleum products and foreign exchange rates in the previous month
“The changes in the price of fuel in December 2018 will only result in a reduction in fuel prices in January 2019,” he said
Lim said the government had incurred a subsidy cost of RM7.14 billion until November this year. -FMT

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