Some station owners are ready to throw in the towel and call it a day
by AFIQ AZIZ/ pic by TMR FILE
THE struggle for petrol stations to stay afloat is getting more intense due to sticky cashflow, especially after attempts to seek the government’s assistance via Special Relief Facility (SRF) under the Prihatin SME economic stimulus package seems unattainable.
Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said some station owners are ready to throw in the towel and call it a day as they find it difficult to maintain their businesses.
He said more owners might also surrender their dealership if they could not find sufficient working capital soon.
“About five to six owners had called us, asking about how they can sell their stations while we arrange a meeting with the Finance Ministry to address this issue.
“They are having problems to cope with this,” Khairul Annuar said.
He said most of the owners of troubled stations had already sought working capital via the fund offered by the SRF scheme to add fuel stock to cope with rising demand, as more motorists are back on the road with the easing of restrictions under the Conditional Movement Control Order (CMCO).
However, Khairul Annuar said only about 9% of the petrol dealers’ requests have been approved.
“The remaining 91% of the applicants either have their applications rejected or put on hold, as the approvals are in progress. Then, after some time, they were informed that the funds have been fully utilised,” he told The Malaysian Reserve in a phone interview yesterday.
An online survey by PDAM participated by over 1,000 respondents shows that only 7.76% of the applicants have successfully obtained the grant, while 15.6% were rejected. The remaining 77.18% are still waiting for their fate.
For the record, PDAM represents all petrol dealer associations in Malaysia which account for about 3,800 stations.
In March, the government unveiled the SRF allocation of RM5 billion that is managed by Bank Negara Malaysia, aimed at alleviating the short-term cashflow problems faced by small and medium enterprises (SMEs) adversely affected by Covid-19.
The financing interest rate for this fund has also been reduced from 3.75% to 3.5%, and it is meant to be disbursed via the banking sector.
With the maximum financing amount of up to RM1 million per SME for a tenure of five and a half years including a six-month moratorium on repayments, the scheme is supposed to be available until Dec 31, 2020.
However, a check at a few banks’ websites stated that the SRF has been fully utilised and as such, it will no longer be offered.
Khairul Annuar said each station needs between RM50,000 and RM150,000 of cash to absorb their losses due to slow business during MCO.
He also questioned the way banks treat the SRF approval. He claimed that banks merely prioritise business owners with good credit rating.
This, he said, defeats the purpose of assisting those who really needed the aid.
“We find that most approval goes to those who generated good sales and revenues, instead of those who direly need it. They either get the aid later or are rejected,” Khairul Annuar said.
He added that some of the applications were rejected due to the applicants’ age, particularly those who have exceeded 60 years old.
“Many oil companies allow sole proprietor ownership to run this business and their request to transfer the ownership is yet to be approved. So, they are stuck with this current situation,” Khairul Annuar added.
Following the enforcement of the MCO on March 18, petrol stations saw revenue and oil stocks dropped by 90% compared to normal days due to travel restrictions.
RON95 was retailed at RM1.89 per litre, while RON97 at RM2.19 and diesel at RM1.96 on March 7.
The weekly prices also steadily decreased to the lowest of RM1.25, RM1.55 and RM1.40 per litre respectively on May 9.
As the government started to ease the restrictions under CMCO on May 4, the oil price started to pick up and settled at RM1.48 for RON95, RM1.78 for RON97 and RM1.63 for diesel.