3,500 petrol stations Lost RM181 million after diesel subsidy rationalisation - BUMIPEDA

The honorary secretary of the Bumiputera Petrol Station Operators Association of Malaysia (Bumipeda), Datin Hanny Julia Haron, claims that since the government decided to float the price of diesel in June of this year, 3,500 petrol stations in the Peninsular have lost RM181 million.

About 98% of stations are reportedly losing money on petrol and diesel sales as a result of the diesel subsidy rationalisation, she said, leading many to turn their attention to running convenience stores in an effort to make up for the falling fuel earnings.

“The current trajectory could have severe long-term effects, including higher unemployment rates and reduced government revenues from taxes and levies.

“The closures or scaled-back operations would also disrupt local economies, affecting ancillary businesses like vehicle workshops and retail shops,” she said.

Julia said that the Automatic Pricing Mechanism (APM), which has been in place since 1983, needs to be reviewed by the government. She emphasised that in order to represent the current state of the economy, the APM needs to be in line with the national annual budget.
She also mentioned that the US dollar has a significant impact on the cost structure, which impacts the margins of both oil firms and petrol stations.

The price of diesel at all retail stations on the Peninsula has been fixed at RM3. 35 per litre as of 12.01 a.m. on Monday (June 10), which is the unsubsidised market price based on the May 2024 average calculated using the APM formula.