KUALA LUMPUR, Jan 4 — Petrol station operators are expecting to incur losses of up to RM40 million when the new fuel pump prices come into effect on midnight, Petroleum Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said today.
In a report by Astro Awani, he said the reduction of fuel by 14 sen per litre for diesel and 27 sen per litre for RON95 and RON97 petrol respectively will result in RM30 to RM40 million in petroleum retail losses, based on existing fuel stocks.
“All operators will have to bear with it. However. we welcome the announcement by the government after they took into consideration the margin of losses which we must sustain,” Khairul was reported saying.
The retail prices of RON95 and RON97 petrol, as well as diesel, will be reduced to RM1.93 per litre, RM2.23 per litre, and RM2.04 per litre respectively from tomorrow until January 11, the Finance Ministry announced earlier today.
RON95 and RON97 retail prices fell 27 sen from RM2.20 and RM2.50 per litre respectively, while diesel dropped 14 sen from RM2.18 per litre.
The fuel prices will remain in effect from tomorrow until next Friday, January 11.
Although admitting the announcement provides balance for all involved, he said the crisis resulting from the fuel price mechanism indicates it could be further refined.
“We do not want to buy [fuel stocks] at a higher price only to sell for lower, as various issues can arise such as the weekly difficulties between us and transportation logistics.
“Even more complicated is the uneven supply level. We sustain losses when prices decrease more than they increase, since many do not fuel up [when prices are higher],” Khairul reportedly said.
Despite that, PDAM in a separate statement earlier also acknowledged the current retail pricing rate is the best decision in light of the country’s present economic stance.
“One can only hope the government will keep its doors open to negotiate with all involved regarding the weekly setting of fuel prices.
“We face many challenges with regards to the fluctuating prices, which leads to uncertain margins of sale,” Khairul said in the statement.
He also thanked Prime Minister Tun Dr Mahathir Mohamad on behalf of petrol station operators nationwide, for his willingness to meet them to hear their concerns out.
“The announcement has given us some room for breathing space and enabled us to continue operating,” he added.