Petrol station retailers across the country do not welcome the government’s proposal to impose ceiling price on all fuel grades at petrol stations nationwide, says Sarawak Petroleum Products Agents Association president Edwin Banta.
Retailers are concerned that the ceiling price proposal would create a non uniform price for all fuels sold at petrol stations because this will lead to a price war among petrol brands and also between individual petrol stations, which means petrol stations will have to sacrifice their short term margins.
The Ministry of Finance should continue to fix the pump prices in the market and possibly find a different solution to the current problem which will not lead to more problems, he stressed.
“This may initially be good for the consumers but as more and more petrol stations eventually shut down, the consumer will have to travel further and further to buy their products from a limited number of sites. Retailers will have to retrench their staff and will choose to provide the bare minimal services to their customers in the event of a price war. This is because services will not be the purchasing point for consumers anymore, and profit margin for retailers will not permit them to employ sufficient staff to help the consumers,” Edwin said.
“Rural communities will suffer the most as there will be minimal or zero competition in their areas as opposed to urban sites. A single petrol station servicing an entire town will most likely place their price at ceiling level and that will cause hardship to the rural communities. Also, areas with a limited number of petrol stations will experience the same predicament. Furthermore, rampant illegal activities will surface, where illegal activities to buy at minimal price but in very high volume will lead to petroleum unavailability for the other consumers,” he added.
Edwin was reacting to a Feb 9 Bernama report quoting Second Finance Minister Datuk Seri Johari Abdul Ghani as suggesting a ceiling price on all fuel grades sold at petrol stations.
Johari pointed out that the setting of a ceiling, said to be apparently fair to all, was one of the options the government was considering to tackle the issue of escalating oil price.
“When we (the government) have decided on the ceiling price, whether they (oil and gas industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them,” he told reporters at the Chinese New Year celebration hosted by the Malay Retail Chain Association in Kuala Lumpur then.
He, however, said the government was mindful whether the policy would be a problem for those living on the outskirts.
He said it was also wary of industry players having a tendency to pay more attention to obtaining revenue from consumers in the city and do not want to do the same for those in the outskirts.
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