Malaysia
Rafizi warns of petrol stations’ closure amid losses
Pump attendant Muhd Babul Khan, 26, who works at a petrol station in Petaling Jaya, fills a car with RON95 but a sign at the green pump says it has run out of RON97. u00e2u20acu201d Picture by Azinuddin Ghazali

PETALING JAYA, Jan 7 — Petrol stations could be forced to shut down as they are incurring losses in the thousands due to Putrajaya’s sloppily implemented managed float system for petrol pump prices, PKR vice-president Rafizi Ramli alleged today.

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The Pandan MP said the federal government had failed to take into consideration the higher prices petrol station operators had to pay for its fuel inventory, which were already stocked up before the drop in RON95 and diesel prices on January 1.

“This is why I condemn the Barisan Nasional (BN) government for making such a hasty decision to remove fuel subsidy without thinking of its effect on the rakyat,” Rafizi told a press conference at PKR’s headquarters here.

“Apart from exposing the rakyat to higher fuel prices, the new policy also victimises petrol station operators who are forced to cover the losses,” he added.

Rafizi noted that petrol stations were still paying RM2.26 (minus 14 sen commission) for RON95 per litre prior to January 1 and when it dropped to RM1.91 a litre, operators incurred a 21 sen per litre loss.

According to the federal lawmaker, this meant that one station incurred an average loss of RM10,000 to RM15,000 automatically when the new price was in place as each station would already have in its inventory around 50,000 to 70,000 litres of fuel at a time.

He added that petrol stations, which make around RM5,000 to RM10,000 on average each, would be suffering losses for all of January.

“If this continues, there’s a risk that many operators would have to close shop,” he said, adding that this would also affect supply.

Since most of the operators are small to medium scale, Malaysia’s push for enterprise could be badly hampered, he added.

“And remember majority of them are Bumiputeras… where are the Perkasa and Isma? Why have they been silent about this?”.

Putrajaya last month announced that direct fuel subsidies for consumers will be eliminated completely, with prices set using a managed float similar to that employed for RON97 since July 2010.

Continuing his opposition to subsidy removal, Rafizi argued the subsidy system not only benefits consumers but petrol station operators as well.

“I am firm in wanting the cheapest fuel for the people but I also want a fair pricing system that could ensure stability in supply of petrol and diesel for the rakyat,” he said.

The federal lawmaker said he will propose an alternative system in the coming days and demand the Domestic Trade and Consumer Affairs Minister Datuk Hasan Malek to respond.

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