Latest news with #RM2.05
The Star
10 hours ago
- Business
- The Star
RON95 price will not be raised, assures Anwar
ISKANDAR PUTERI: The price of RON95 petrol will not be raised, even if there is a sharp increase in global crude oil prices due to geopolitical tensions involving Iran and Israel, assures the Prime Minister. Datuk Seri Anwar Ibrahim said that although the price increase benefits the national petroleum company, the government aims to avoid burdening the people with higher fuel costs. Any future adjustments will be made carefully, taking into account the needs and financial capacity of the people, he told a press conference after a closed-door meeting with Johor PKR leaders and members. The price of RON95 for June 19-25 remains RM2.05 per litre. Anwar said the recent increase in global oil prices is due to sudden changes in the international market, despite prices previously remaining at relatively low levels. He said fluctuations in oil prices are a common occurrence, but the latest spike was particularly abrupt, triggered by the recent Israeli military assault on Iran. 'Oil prices go up and down. The increase this time has been quite sharp. 'This hike is partly due to increased demand and contributes to national revenue. However, we are not raising domestic fuel prices,' he said. The Prime Minister also said that a detailed explanation will be provided regarding the implementation of the review and expansion of the Sales and Service Tax (SST) scope which will take effect on July 1. He said the government acknowledged there has been confusion regarding the implementation, but gave assurance that the government's initiatives will not burden the lower-income group or the M40. 'We will give an explanation. Sometimes, general statements, such as saying bananas will be subjected to SST, cause confusion. Actually, it refers to imported bananas. 'But I agree we need to clarify this because what is important is that we do not want to burden the lower-income group or the M40,' he said.
New Straits Times
04-06-2025
- Business
- New Straits Times
Ron 97, diesel prices in Peninsular Malaysia down by 3 sen
KUALA LUMPUR: The retail price of RON97 petrol in Peninsular Malaysia will be reduced by three sen to RM3.07 per litre from June 5 to 11, 2025, in line with the drop in global oil market prices, according to the Finance Ministry (MOF). In a statement today, the Finance Ministry also announced that the retail price of diesel in Peninsular Malaysia will similarly be reduced by three sen to RM2.74 per litre for the same period, while the price of RON95 petrol remains unchanged at RM2.05 per litre. "The retail price of diesel in Sabah, Sarawak and Labuan will also remain at RM2.15 per litre," said the ministry. The weekly pricing of petroleum products is determined using the Automatic Pricing Mechanism (APM) formula, taking into account current global crude oil market trends. The statement also noted that the government will continue to take appropriate measures to ensure the welfare and well-being of the people are safeguarded. — BERNAMA
New Straits Times
03-06-2025
- Business
- New Straits Times
Petrol dealers' hidden burden
KUALA LUMPUR: Petrol station operators nationwide are seeing their profit margins from petrol and diesel sales increasingly eroded. A major cause for the margin erosion is the fees charged by banks and e-wallet companies on card transactions, according to an industry observer. While an increase in the national minimum wage to RM1,700 per month and rising energy costs are cited as among key contributing factors, the observer said the Merchant Discount Rate (MDR) imposed by credit card companies and e-wallet platforms may be quietly inflicting the greatest damage. MDR is a non-discretionary expense beyond the control of petrol dealers but it is not present in the original Automatic Pricing Mechanism (APM) of 1983, making it a substantial external burden, said Rahim Kamil Sulaiman. Rahim, who worked in the oil and gas sector since 1977, claimed that this trade practice denies retail entrepreneurs a fair share of profit. He shared that the issue is particularly pressing as digital payments now account for more than 90 per cent of fuel transactions. "For a credit card that charges one per cent per transaction, the MDR cost for RON95 at the pump price of RM2.05 per litre is 2.05 sen per litre. Since petrol is a controlled item, banks cannot impose the MDR cost on the consumer, as the pump price is the final price." At present, however, the burden falls on the station operator, cutting their margin by 2.05 sen per litre, or 13.7 per cent, the second-largest after direct labour costs, he said. Rahim said the erosion of 13.7 per cent of sales commission income is exceptionally high because this single cost item excludes operating costs such as direct labour, electricity and working capital. "These discretionary operating costs already reduce commissions by 48.1 per cent. Fixed costs, including management, administration and various other expenses, will further add to the business's overall cost. "High fixed costs and diminishing margins will mean that, in 2025 and beyond, the majority of stations will break even at rates higher than 70 per cent, with low-volume stations losing money every month at break-even points exceeding 110 per cent." He added that it is likely that the low-volume stations will deplete their hard-earned reserves within two years. Five months ago, Bumiputra Petroleum Dealers Association (Bumipeda) reportedly warned that over 75 per cent of Peninsular Malaysia's 3,500 petroleum station operators could lose more than RM100 million in 2025. Bumipeda cited a minimum wage increase to RM1,700 per month effective February this year and a potential increase in electricity tariffs in July as primamry reasons. Bumiputera entrepreneurs manage around 70 per cent of the national retail network, which includes both dealer-owned-dealer-operated (DODO) and company-owned-dealer-operated (CODO) stations. Cash Flow Trap Rahim noted that the petroleum retail industry, worth around RM60 billion annually, is a strategic component of Malaysia's political economy, with Bumiputera dealers controlling at least 70 per cent of the network. He said most station operators replenish stock with cash before or on delivery without receiving credit from oil companies or banks. "The dealer's cost is RM1.90 per litre, after deducting a 15 sen per litre margin as mandated by the government under APM, enforced under the Price Control and Anti-Profiteering Act (PCAPA). "The station operators need between RM100,000 and RM250,000 in working capital, depending on the station sizes. Banks (credit card providers) do not finance the operators' working capital or any other business operations to justify charging them a fee," he said. Rahim added that the government mandates petrol stations to keep sufficient stock to guarantee uninterrupted fuel supply at all times. He also noted that stock replenishment occurs frequently, typically every four days, which results in higher MDR costs for stations with greater sales volumes due to more frequent restocking. Rahim said to understand how station commissions are being eroded by the credit card system, consider the typical cash-to-cash cycle for a petrol dealer - the period between purchasing stock and receiving payment through sales - which averages just four days. "Given that MDR charges are typically around one per cent transaction, this translates to an effective daily rate of 0.25 per cent (1.0 per cent ÷ four days) applied to the pump price of RM2.05 per litre. "However, dealers only earn a fixed commission of 15 sen per litre. When the MDR is applied against the full pump price rather than the dealer's actual commission, the burden becomes disproportionately high. "Specifically:(0.25 per cent x RM2.05) ÷ RM0.15 = 3.41 per cent per day, which translates to 1,260 per cent per annum. "This means dealers are effectively absorbing an interest rate of over 1,200 per cent annually, despite having no control over the transaction fees or the retail price they must adhere to under the APM," he explained. By contrast, banks typically charge consumers less than 20 per cent per annum for credit card balances, with most base lending rates hovering around 12 per cent. "In this context, the rate borne by station operators is not just excessive - it borders on exploitative, especially considering the low risk to banks and the short cash recovery cycle involved," he said. Calls for Reform Rahim believes that the MDR cost should be borne by either the oil companies or the consumer, as both are effectively involved in the transaction. He said the government ought to revisit the fuel subsidy rationalisation programme in consultation with key stakeholders such as oil companies, petrol station operators and the price controller under Domestic Trade and Cost of Living Ministry, which holds sole authority over price setting under the Price Control and Anti-Profiteering Act. He added that the act should empower both the price controller and the Price Advisory Council to reassess the APM, particularly in light of major shifts in the petroleum retail landscape and currency fluctuations. "Fortunately, the present government has successfully strengthened the ringgit, which will countervail commodity price increases. "This positive note could facilitate a thorough review of the APM and fiscal measures necessary to target subsidies to those in need in a manner that addresses the economic problem most effectively, rather than imposing financial technology as a solution," Rahim said. Business Times has reached out to Petrol Dealers Association of Malaysia and The Association of Banks in Malaysia for comments. Meanwhile, an economist suggested that the issue of margin pressure by low-volume petrol stations due to MDR fees could be addressed by having credit card companies and e-wallet providers temporarily subsidise a portion of the fees. Universiti Kuala Lumpur Business School economic analyst Associate Professor Dr Aimi Zulhazmi Abdul Rashid said the temporary concession could be for two years, with the subsidy gradually reduced over time. "The providers aim to grow transaction volumes, so it is only fair they subsidise MDR costs using gains from the higher and rising volumes in urban areas," Aimi said. He added that smaller petrol stations actually benefit from cashless transactions by reducing risks such as handling petty cash, counterfeit or damaged notes, and employee theft. "From that perspective, the slight margin reduction that the petrol stations need to absorb may be worthwhile in view of the risks mentioned above," he said.
BusinessToday
30-05-2025
- Business
- BusinessToday
Analysts Back Sime Darby Property On Its Solid Pipeline Of Projects
Sime Darby Property Bhd - Ready-built Warehouse (Source Official wesite Nov 2024) Sime Darby Property Bhd (SDPR) maintains strong analyst support with RHB Investment Bank Bhd (RHB Research) and Hong Leong Investment Bank Bhd (HLIB) both reaffirming their BUY calls. RHB Research assigns a target price of RM2.33, implying a 64% upside from the current market price of RM1.42, while HLIB maintains a slightly more conservative target price of RM2.05, projecting a 44.4% capital gain plus a dividend yield of 2.3%, resulting in an expected total return of 46.7%. The positive outlook reflects confidence in Sime Darby Property's resilient sales momentum and strategic development plans. According to RHB Research, Sime Darby Property's first quarter of fiscal 2025 earnings fell short of expectations due to delayed recognition of some industrial property sales. Nevertheless, property sales remained robust at RM928 million, putting the company on track to meet its annual sales target of RM3.6 billion. The quarter saw industrial products contributing half of total sales, with residential high-rise, landed residential, and commercial properties making up the remainder. RHB Research noted the upcoming launch of KLGCC Mall in the second half of 2025 and the timely delivery of two data centres as key growth drivers. The firm also highlighted improved cost efficiency and reduced finance expenses as positive factors, with net gearing slightly rising to 0.28 times. HLIB described the first quarter results as within expectations, with core profit after tax and minority interests (PATAMI) rising 20.1% quarter-on-quarter to RM115.6 million despite a 10.8% revenue decline. This was largely attributed to better profit margins from a favourable product mix and lower compliance costs. Sales for the quarter were steady at RM927.5 million, representing about 26% of the company's full-year sales target. HLIB also pointed to strong unbilled sales of RM3.84 billion, the highest since 2017, signalling healthy revenue visibility. The firm forecasts steady earnings growth, adjusting its FY25 and FY26 projections slightly while introducing a positive outlook for FY27 with core PATAMI expected to reach RM663.2 million. Both research houses highlight the strength of Sime Darby Property's industrial segment, with HLIB emphasising the ongoing construction of Google's hyperscale data centre, scheduled for completion in the second half of 2026. The company's investment property portfolio is expanding, with KLGCC Mall nearing opening and strong occupancy gains in its Metrohub industrial assets. These recurring income streams are expected to boost future earnings as leasing activity remains robust. Looking forward, analysts are optimistic about Sime Darby Property's prospects, citing its diversified product offerings across residential, commercial, and industrial sectors as a key advantage. The anticipated completion of the East Coast Rail Link (ECRL) by end-2026 is expected to benefit the company's industrial landbank near Klang station, improving sales and rental yields. Both RHB and HLIB believe the group's balanced approach, combining development-driven growth with steady expansion of its investment property segment positions Sime Darby Property well for sustainable long-term earnings growth. In conclusion, Sime Darby Property continues to deliver on its strategic goals with solid sales momentum and growing recurring income, backed by positive analyst ratings and substantial upside potential from current share prices. Related
The Star
28-05-2025
- Business
- The Star
Fuel prices May 29 - June 4: Diesel down 3 sen while RON95, RON97 stay unchanged
KUALA LUMPUR: The government has decided to reduce the retail price for diesel in Peninsular Malaysia by 3 sen to RM2.77 a litre for the period of May 29 to June 4, in line with changes in global oil prices. The Finance Ministry also announced in a statement today that the retail price of diesel in Sabah, Sarawak and Labuan remain at RM2.15 per litre. Also, the retail price of RON97 and RON95 petrol remain at RM3.10 a litre and RM2.05 a litre. The determination of weekly retail price of petroleum products is based on the Automatic Pricing Mechanism. "The government will continue to monitor market developments and adjust the retail price of diesel by taking into consideration oil market price movements and to support price stability,' the ministry said. The government will also take suitable measures to ensure the people's welfare and prosperity, it added.- Bernama
