Petrol dealers suffer RM139m loss in less than a month

The lower income is also due to the continuous downtrend of the global Brent oil price and the current MCO


PETROL dealers have suffered losses of some RM139 million in the last three subsequent weeks as a result of the coronavirus outbreak.

Petrol Dealers Association of Malaysia president Datuk Khairul Annuar Abdul Aziz said based on the latest data collected from about 3,800 station owners, each outlet recorded around 70% of losses or around RM40,000 per station from last month.

He said the lower income was also due to the continuous downtrend of the global Brent oil price and the current Movement Control Order (MCO) that was initiated by the government on March 18.

The Brent crude was traded at a high of US$52.20 (RM228.90) per barrel as of end-February, before diving to the lowest of US$24.90 per barrel on March 18.

It was still being traded below US$30 per barrel at press time.

“There is nothing much we can do. First, the sales were down by 70%. With the low sales and the latest price drop, we still have stocks that need more than one week to clear.

“For example, the price for RON95, we have more than seven days’ stock on March 20. If we count the current sale, each litre that we sell translates to 23 sen loss.

“On top of this, the cost per normal operations is around 11 sen to 12 sen per litre and now the sales volume has dropped further (after MCO announcement). We are losing at least 34 sen to 35 sen for one litre,” Khairul Annuar told The Malaysian Reserve in a text reply recently.

The country’s fuel price is determined by a weekly system based on an automatic pricing mechanism formula.

The prices per litre for RON95 and RON97 have been dropping exponentially for three weeks since March 7.

On March 6, RON95 was retailed at RM2.08, while RON97 was RM2.40. RON95 was then sold at RM1.89, while RON97 at RM2.19 on the next day.

From March 21 to 27, RON95 and RON97 are being sold at RM1.44 and RM1.74 per litre respectively — a 30.7% drop for RON95 and 27.5% for RON97 compared to the last high on March 6.

Khairul Annuar said the reduction has wiped near RM139 million off petrol dealers’ revenue. As such, he pleaded for the government to set fixed petrol prices during the MCO or even in the case of total lockdown, in order to stabilise their margin.

“If nothing is being done, stations will be closed as there will be no more working capital that we can work for,” he said.

He also urged the authority to allow petrol stations nationwide to operate only 12 hours a day from 7am to 7pm to reduce their electricity usage and staff overtime allowances.

“These are the two biggest costs. By doing this, we can also separate the staff into a few teams to work on different days in case any of them has tested positive for Covid-19 and is being quarantined. At least, we can still spare some resources for the station to continue operating,” Khairul Annuar added.

He said station owners should also operate their retail marts through pigeon holes to minimise the risk of infection. Khairul Annuar said the fear of infection is real and more workers are beginning to opt for leave to avoid any Covid-19 contamination.

“Please make masks and sanitisers available for us to purchase as the products are always out of stock,” he added.

Khairul Annuar also appealed to the government to include petrol dealers in the 15% electricity discount entitlement.

Last week, the government had agreed to provide a 15% discount on electricity consumption for up to six months to six selected business sectors that are impacted directly by Covid-19.

However, the discount is only applicable to the tourism industry involving the hotel operators, travel and tourism agencies, shopping complexes, convention centres, theme parks and local airlines offices.

Khairul Annuar added that the discount is essential for petrol dealers as they cannot bear the basic costs as the fuel prices continue to drop.