KUALA LUMPUR – The government is being urged to exercise prudence in making any decision pertaining to the impending hike in rental charges imposed by foreign oil companies on local petrol dealers.
Malay Chamber of Commerce Malaysia president Abdul Halim Husin said that while he agrees with federal intervention on the matter, the government must not get too involved to avoid disrupting the free market and deterring future foreign investments.
“Whatever the government does, it must be cautious so as not to be seen as an administration that dictates every little thing, including the market,” he told The Vibes yesterday.
He was commenting on calls made by petrol dealers urging the government to step in on what they claimed to be oil companies squeezing them on rental charges.
Sources had previously told The Vibes that the foreign firms plan to increase rent, despite dealers suffering much lower revenue over the past year-and-a-half due to Covid-19 travel restrictions.
It is understood this will be done by charging dealers more for their petroleum products.
Presently, operators earn about 15 sen per litre for petrol products and 10 sen per litre for diesel.
From this, they have to pay about 4.4 sen to 4.9 sen per litre to the foreign oil firms.
Shell Petroleum Dealers Association of Malaysia president Datuk Wahid Bidin had also said that officials from the Domestic Trade and Consumer Affairs Ministry had met with the association and representatives from Shell last month to try and resolve the matter.
The Vibes has reached out to the ministry for comment but has yet to receive a response.
Halim said instead of urging the government to impose restrictions on the companies, it should be the corporate responsibility of the firms to provide some breathing space to petrol dealers that have been impacted tremendously by the Covid-19 pandemic.
“As big corporations have been earning billions each year before this, now is the time to return the favour (to the dealers),” he said.
Halim also warned that a rental hike could force petrol dealers to pass on the extra costs to consumers by way of increased prices of goods sold in petrol marts.
Meanwhile, Petroleum Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said discussions are currently ongoing between the association and the government to look for a win-win situation for all parties.
He said that going by past experience, even though only one foreign oil company has said it will increase rental charges at the moment, this will typically influence other firms to take similar measures.
“We are still talking to the minister (Datuk Seri Alexander Nanta Linggi), and I hope all petrol dealers can stay put and not commit to any (agreements) just yet.”
Khairul said PDAM is currently looking forward to having another meeting with ministry officials soon, and is hoping for good news. – The Vibes, October 14, 2021
