From frying pan into the fire for petrol dealers during MCO

Fewer people are venturing out to refuel their cars during the movement control order to curb the spread of Covid-19.

PETALING JAYA: Petrol dealers already struggling to break even amid a drop in world oil prices say they have lost about 70% of their normal earnings since the movement control order (MCO) took effect a week ago.

Petrol Dealers Association president Khairul Annuar Abdul Aziz said as it is, the weekly fuel changes affect their business as prices change every Friday.

“Our stock usually lasts for five to seven days. As of March 20, our stock may last seven to 15 days. We buy at a certain price, and on Friday, the prices change again.

“But now, the prices keep dropping and it’s eating into our profits,” he told FMT.

For instance, he said, RON95 fuel sold at RM1.44 per litre was bought at RM1.67 the previous week, causing a 23 sen loss. He said this does not include operational costs which are another 11 to 12 sen.

While their profit is usually 15 sen per litre, he said, weekly petrol price changes eat into their margin whenever they sell at lower prices than which they bought.

With the ongoing MCO in place and without government intervention, he said, petrol station owners might start shutting down as operating costs exceed profits.

“As long as we are open, we are losing money. With the MCO, there is so much stock and hardly any sales.”

Before the MCO, he said, petrol dealers had lost 40%-50% of their income due to unstable oil prices.

Now, he said, they are losing about 70% as people are not venturing out to refuel their cars.

He added however that most petrol dealers are requesting 7am-7pm operating hours as it will reduce their operating costs, especially in terms of electricity bills.

“That’s our second highest operating cost,” he said. “It will save us up to 50%.”

He said his members plan to split their workforce into two teams to tackle the Covid-19 crisis.

“If anyone from Team A is down with Covid-19 and under quarantine, members from Team B will take over.”

He also advised members to close the doors leading to payment counters so that motorists pay for fuel through the pigeon holes.

“We will provide hand sanitiser at the pigeon holes, and customers will be told to use it before leaving the station,” he added.