Petrol station operators lost RM181 mil after diesel subsidy rationalisation

In June, the Malaysian government implemented diesel subsidy rationalisation as part of its efforts to curb rampant leakages.

However, the move appears to have had negative repercussions for petrol station operators in Peninsular Malaysia, who claim to have incurred losses amounting to RM181 million since its implementation.

According to Bumiputera Petrol Station Operators Association of Malaysia (Bumipeda) honorary secretary Hanny Julia Haron, nearly 3,500 petrol stations are now at a critical level, having sustained losses almost every month.

She added that the situation arose as operators were forced to purchase fuel at high prices and sell it at lower prices.

“About 98.3 per cent of these stations have reported losses from petrol and diesel sales, causing many operators to shift towards convenience store sales as a strategy to offset the decline in fuel revenue.

“Without intervention, the long-term economic impact could be severe, potentially increasing unemployment rates and reducing government revenue from taxes and levies due to the closure of stations or a reduction in operations,” she stated.

Earlier this month, Deputy Finance Minister Lim Hui Ying revealed that the targeted diesel subsidy initiated in June this year has allowed the government to generate savings of RM600 million per month.