PESAMP Continuous Effort in Engaging Government to Ensure Survival and Continued Prosperity of Petrol Retail Industry

Post date: Dec 25, 2016 7:08:39 AM

Latest Update, 3 Dec 2016 : PESAMP have met with both Ministers (KPDNKK and MoF) in a meeting arranged by our newly appointed Patron, Dato' Shohaimi Shahadan recently. The meeting was very fruitful where ultimately both minister's are positive to our proposals. They will need to discuss the proposal brought by OilCo to increase their portion in the APM as well, after which, Insya Allah our proposal will be considered and implemented.


25th Dec 2016

Salam all dealers,

It has been a while since I have updated all of you on our current focus in enggaging the government to ensure the continued survival and prosperity of all Petrol Retailers.

For the past year, PESAMP has been engaging multiple parties, including the Prime Minister's Office (PMO), Ministry of Finance (MoF) and Ministry of Domestic Trade, Cooperative and Consumerism (KPDNKK).

Our focus has been on the following:

Immediate term

Survival of our low volume dealers. In line with the YAB Prime Minister's focus on the development and ensuring continuous prosperity of the B40 community in Malaysia, PESAMP has stepped up its effort in championing the cause of our low volume dealers.

A very interesting statistic was discovered when we were comparing notes with other brands within PDAM, that majority of stations in Malaysia are actually low volume stations, selling less than 400kl per month. We have zoomed into the 4 main cost drivers, namely HR (Increased due to the implementation of Minimum Salary), Credit Card Commission (Increasing use of Credit card leading to increase in credit card commission), utility bills (Increase in Electricity Tariff and other utility bills) and License Fee.

To date, we have presented our proposals to all relevant departments, starting with KPDNKK, MoF and finally PMO. Alhamdulillah, the push came about when the issue was discussed with the PMO on this matter. This was when our plight is heard and taken seriously, and we have completed our discussions in working groups with KPDNKK and PMO and our proposal has been approved and forwarded to MoF by KPDNKK for their considerations. The main focus is to ensure even low volume dealers are ensured viable returns to investment, as in the current scenario, majority of low volume dealers are running a loss making business. The proposal includes cost cutting measures as well as streamlining and protection of dealers' income as provided for under the Automatic Pricing Mechanism (APM).

Long Term

In preparation of the ever changing business climate in Petroleum Retail Industry, PESAMP is in discussion with the relevant authorities to prepare ourselves to face the challenges that this changing climate brings:

  1. Technological changes leading to reduction of fuel consumption for every vehicle, especially apparent in the developed nations where Hybrid and Electric cars has seen demand for fuel either stagnant or even ruduce, even with the increasing number of vehicles registered on the road.

  2. Public transportation versus personal vehicle. The construction of more efficient public transportation system especially the MRT and LRT in the Klang Valley, will create a reduction in fuel consumption for the city folks.

  3. Deregulation - In line with the government's vision of abolishing subsidy to channel Government expenditure to more pertinent expenses such as Education and Healthcare, there is constant debate as to whether Malaysia need to follow some of the developed nation to fully deregulate the fuel retail market. Even though PESAMP is of the stand that we are not ready to face deregulation, we need to prepare ourselves if it happens, and to continuously engage the government to explain that we are not ready, and if the government insist, then a few changes need to be made to ensure the successful SME created by the government in this industry be protected and ensure its continued survival and prosperity post Deregulation.

We have been invited by PEMANDU to discuss various aspect of our industry, including future challenges that we will face, and drawing from the experience and knowledge we learnt from our study trip in Australia, we managed to give meaningful input into the discussion, and come up with some suggestions to ensure our interest is protected.


Dato' Khairul Annuar bin Abdul Aziz

President PESAMP 2016-2018