KOTA KINABALU: Shell Malaysia has been summoned to a meeting with Chief Minister Datuk Seri Hajiji Noor to explain the reason for the unannounced closure next January of 35 retail stations in the state and Labuan.
“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,” Hajiji said in a statement on Friday (June 23).
News broke earlier this week that 35 Shell stations would be closed in early January: 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.
Shell Timur Sdn Bhd, which operates Shell kiosks in Sabah and Labuan, confirmed earlier on Friday it was closing several less productive retail stations to sustain the company’s performance in an ongoing review.
It is understood that the Sabah government has a 15% equity stake in Shell Timur through the state-owned Yayasan Sabah Group.
It is also learned that Shell officials have informed the group of the closure but have yet to engage the higher rungs of the Sabah government regarding the matter.
According to news reports, the move was mainly because of losses sustained over a number of years because of the automatic price mechanism (APM), which has not been reviewed since 1998.
The APM is a formula used to calculate the price of fuel in the country.
It was reported that more than 500 people would lose their jobs once the closure takes place next year.
It is uncertain how the news will affect business confidence in the state after the multinational company relocated its upstream headquarters from Kota Kinabalu to Miri on Aug 26.
Shell used to occupy the top four floors of the 14-storey Plaza Shell in the heart of the city here, with some 200 employees of various nationalities involved in the upstream and downstream operations there.
The company currently occupies only one floor, with downstream staff and a skeleton crew handling upstream matters.
