KOTA KINABALU, Oct 3 — After controversial news that Shell would be shuttering over 30 of its petrol kiosks in the state, the petroleum giant has decided to rescind its decision following a series of discussions with the Sabah government.
In relaying the news, Sabah Chief Minister Datuk Seri Hajiji Noor said that the state government welcomes the reversal.
“We have brought this issue to the attention of the federal government, we appreciate the federal government’s sensitivity to the situation in Sabah and we appreciate that they have listened,” he said in a statement here.
He was referring to Shell Timur Sdn Bhd’s announcement not to proceed with the closure of its 34 petrol stations in Sabah starting January next year.
Shell Timur Sdn Bhd, which operates Shell kiosks in Sabah and Labuan, had confirmed in June that it will be closing several less productive fuel retail stations there to sustain the company’s performance in an ongoing review.
It was reported that those affected were 10 in Tawau, two in Semporna, six in Lahad Datu, 12 in Sandakan, two in Labuan, and one each in Likas, Telipok and Kuala Penyu.
The closures would likely cause the loss of jobs to some 500 people around the state. Following the news, Hajiji had met with Shell Malaysia chairman Siti Hurrairah Sulaiman to discuss the matter.
The state has a 15 per cent equity stake in Shell Timur through the state-owned Yayasan Sabah Group.
According to news reports then, the closures stem from the automatic price mechanism (APM), which has not been reviewed since 1998, causing sustained losses over the years. The APM is a formula used to calculate the price of fuel in the country.