Petrol Dealers Association skipped meeting with minister, says unhappy with Putrajaya

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KUALA LUMPUR (Jan 16): The Petrol Dealers Association of Malaysian (PDAM) did not attend the meeting on fuel prices chaired by Domestic Trade, Cooperatives and Consumerism Minister Datuk Hasan Malek last Friday, adding that it would not have helped to solve their predicament anyway.

According to the meeting’s agenda, one of the topics they were to discuss was the losses that petrol dealers had incurred ever since Putrajaya changed the Automatic Pricing Mechanism (APM) to the float management system this year.

Association’s president, Datuk Hashim Othman, however, told The Malaysian Insider that PDAM had not sent a representative to the meeting because he had lost his phone last week and could not be contacted.

“I don’t know what transpired in the meeting. But it’s not like the minister could have done anything to help us,” said Hashim, referring to the losses petrol dealers were suffering.

“In the end, it’s the Ministry of Finance’s prerogative. The Ministry of Domestic Trade, Cooperatives and Consumerism can only advise and execute. So, even if we had spoken with them at the meeting, they could not do anything.”

Hisham said he had spoken to the Finance Ministry and the Prime Minister’s Office for two years about their woes, yet nothing had been done.

“Either they don’t understand the problems that we are facing, or they don’t bother about us. We’ve been talking about this issue for two years already with various ministers, including Datuk Ahmad Maslan, but nothing has happened. They are not concerned.”

According to Hashim, a petrol station would immediately suffer a loss of RM20,000 to RM100,000 each time lower fuel prices were announced. This was because they had already purchased their stock of fuel from oil companies upfront at a higher price.

“The best way to support us is to operate on a consignment stock basis, where we only pay the oil companies based on how much we sell. That way, it doesn’t matter whether fuel prices go up or down,” said Hashim.

With the implementation of a consignment-based system, petrol dealers do not have to pay oil companies to obtain the fuel stock. Instead, they collect commission on the volume they have sold.

The current system, however, forces petrol dealers to purchase the fuel stock beforehand, as determined by the oil companies, exposing them to financial risk should pump prices plunge.

Hashim said the small petrol dealers in rural areas were the most vulnerable, adding that if they had to shut down their operations, this would also be an inconvenience for the public.

“I’m very worried. I just came back from Sabah, and the dealers there are hardly making any money. They are getting very jittery. I don’t want anything unhealthy to happen.”

Last week, PKR secretary-general Rafizi Ramli had called for Putrajaya to adopt the consignment system, saying that there could no longer be any excuses that fuel prices cannot be revised on a weekly basis.

Putrajaya has resisted calls for weekly revisions of petrol and fuel pump prices despite the continued plunging of global oil prices, which have reached below US$50 a barrel last week, and is expected to be at US$40 a barrel by the end of the month.

It removed fuel subsidies early this month due to the tumbling of global oil prices and set up a managed float pricing system where prices would be set based on a monthly average price. The price would be announced at the end of each month for the following month.

Rafizi had previously alleged that Putrajaya made RM633 million in one month from the difference between world oil prices and the price Malaysians pay for petrol and diesel.

He said if the Barisan Nasional-led federal government refused to revise the system, it meant it wanted to maintain above-market prices to collect taxes from the commodities.