KUALA LUMPUR – Petrol dealers are urging the government to intervene as they believe foreign oil companies are squeezing them on rental charges.
Sources familiar with the matter told The Vibes that foreign firms are planning to increase rent despite dealers suffering lower revenue due to Covid-19 travel restrictions.
There are two types of petrol dealers. The first – a minority group – is known as dealer-owned stations, where dealers have the financial capability to handle all capital expenditure, while the second group comprises company-owned dealers.
It is the latter group that needs to pay additional charges from their net margins in return for running a station built and set up in partnership with a petrol company.
It is understood that both groups do not make much from the sale of petrol, and complement their earnings from renting out space for ATMs, convenience stores and fast-food outlets.
Operators typically earn 15 sen per litre for RON95 and RON97 petrol products, and 10 sen per litre for diesel products. These rates are set in consultation with the government.
Company-owned dealers also pay up to 4.4 sen per litre in rental charges. Some foreign oil firms are planning to raise this to 4.9 sen.
Dealers who spoke to The Vibes on condition of anonymity said they feel that foreign oil companies are treating them like paid employees, “although we are bona fide dealers ourselves”.
We have invested millions in the business, but are at the mercy of these foreign companies, who dictate and change terms at their whims.”
Another dealer said corporate royalties must also be paid.
“They are crippling business with these unfair practices.”
He said the pandemic has seen about 20% of the country’s petrol stations shut down or changing hands.
“I hope they are not taking advantage of the pandemic to further squeeze us,” he said, adding that these companies make it a requirement to employ migrant workers.
The dealers hailed national oil giant Petronas for being consistent with its regulations and rates.
This is because as a Malaysian company, it is invested in the development of the industry in the country. Foreign companies, however, are not committed. There is an element of exploitation of local dealers and operators.”
It is understood that petrol dealers are seeking Putrajaya’s intervention as they believe such an increase will see them having tighter margins, with some having to bear losses.
“The Bumiputera equity ownership is also impacted here, as about 70% of petrol stations in the country are Bumi-owned,” said an industry insider.
“With the recent emphasis on Bumiputera equity, it is high time that the government look into the exploitation of local dealers by foreign companies.”
The Vibes has reached out to several foreign oil firms, but yet to receive a response. – The Vibes, October 1, 2021
