economy

Bumiputera station owners call for revised commission structure with a targeted petrol subsidy plan

KUALA LUMPUR: Nearly 3,000 Bumiputera petrol station operators may be impacted if the targeted petrol subsidy plan fails to address a revision of the commission structure, said Bumiputera Petrol Station Operators Association of Malaysia (Bumipeda).

Its president Datuk Haji Abd Aziz Haji Sapian in a statement said while subsidies are being directed towards consumers, petrol station operators also require protection.

"The reform of the oil industry is a pressing need, beginning with revisiting the Automatic Pricing Mechanism (APM) that Malaysia has used since 1983."While the APM has been effective in managing global oil price fluctuations, it has not been adapted to reflect the structural changes in the global economy," said Abd Aziz.

He said that a new APM formulation should take into account foreign exchange volatility and global oil price trends, which differ significantly from the 1980s and 1990s.

"Without an updated commission system that reflects today's operational realities, petrol retailers are experiencing significant challenges."

"For example, during the targeted diesel subsidy program implemented earlier, we encountered reduced margins, and without adjustments in the commission structure for petrol, these challenges will only grow," he added.

Abd Aziz said if the government plans to make changes to the system, it should not be done on a piecemeal basis.

"Targeted subsidies must come with a complete revamp of the entire mechanism, not just isolated adjustments."The whole system must be reviewed and restructured comprehensively to ensure fairness and sustainability across the industry," he adds.

The association said it fully supports the government's plan to implement the targeted petrol subsidy program, which is expected to be announced in Budget 2025 by the Prime Minister Anwar Ibrahim this Friday.

"Bumipeda hopes the petrol targeted subsidy program, which is expected to be implemented soon, will be inclusive, addressing the needs of all stakeholders."

"A healthy ecosystem in the oil industry, alongside the empowerment of petrol station operators, will ensure a fair and sustainable partnership between the government and industry players, ultimately benefiting the rakyat," it said.

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