CHIEF Minister Datuk Seri Hajiji Noor will meet with Shell Malaysia to discuss the closure of 35 retail stations in Sabah and Labuan scheduled for next year.
“I am aware of the situation and will be meeting with Shell Malaysia chairman Siti Hurrairah Sulaiman to find out more about the situation and the fate of the affected retailers in Sabah and Labuan,” he said in a statement on June 23.
Shell Timur Sdn Bhd, which operates Shell kiosks in Sabah and Labuan, has confirmed it will be closing several less productive retail stations in East Malaysia to sustain the company’s performance in an ongoing review.
On June 20, it was reported that 35 Shell petrol stations in Sabah and Labuan would be closed by January next year, and 500 people are expected to lose their jobs.
The affected stations comprise 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.
Of the 78 Shell kiosks in Sabah and Labuan, some 35 operators, mostly on Sabah’s east coast and Labuan, told the Minister of Sabah and Sarawak Affairs in the Prime Minister’s Department, Datuk Amizan Mohd Ali that they faced closure at noon on Jan. 8, 2024, as instructed by Shell Timur Sdn Bhd.
The affected Shell fuel stations include 10 in Tawau, two in Semporna, six in Lahad Datu, 12 in Sandakan, one in Kuala Penyu, two in Labuan, besides another two.
They petitioned the Minister to try and help them and some 500 employees at risk of being unemployed next year. They claimed that “this development was ironic since only recently in February this year, Shell Malaysia unveiled its newest formulation for its RON 95 range to Euro 4M RON 95 petrol that was developed over five years with 150 scientists, claiming that the new fuel lasts up to 15km longer per tank and will be available at Shell stations nationwide.”
The operators told the Minister that they received a letter to that effect and following an online meeting, Shell Timur Sdn Bhd’s senior management notified them of the suspension of business as the company has been facing losses for many years because of the Automatic Price Mechanism (APM) in Malaysia, which has not been adjusted since 1998.
Faced with increasing operating costs, the company instructed Shell fuel stations to cease operation in 2024.
Also affected by the closures would be some operators of some fuel transport tankers, petrol station maintenance and repair contractors, and grocery suppliers as Shell Malaysia won the 2020 award for Best in Convenience Retailing at their fuel stations.
