Hajiji to meet Shell over closures

KOTA KINABALU: Shell Malaysia’s proposal to close 35 retail outlets in Sabah could lead to several hundred people losing their jobs there, and state leaders are expressing concern. Shell Malaysia has been summoned to a meeting with Chief Minister Datuk Seri Hajiji Noor to explain the reason behind the move to close 35 retail stations in the state and the federal territory of Labuan next January.

“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 yesterday.

News broke earlier this week that the affected Shell stations are in Tawau (10), Semporna (two), Lahad Datu (six), Sandakan (12), Labuan (two), Likas (one), Telipok (one) and Kuala Penyu (one).

Shell Timur Sdn Bhd, which operates Shell kiosks in Sabah and Labuan, confirmed yesterday that it will be closing several less productive retail stations in the territory to sustain the company’s performance in an on-going review.It is understood that the Sabah government has a 15% equity stake in Shell Timur through 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 senior leadership of Sabah over the move.

According to local media reports, Shell’s move to shutter those outlets was due to losses as a result of the automatic pricing mechanism (APM), which has not been reviewed since 1998.

APM is a formula used to calculate the price of fuel at the retail level in the country.

It is uncertain how the latest move by Shell will affect business confidence in the state after the multinational also relocated its upstream headquarters from Kota Kinabalu to Miri on Aug 26 last year.

Shell used to occupy the top four floors of the glamorous 14-storey Plaza Shell, which is located in the heart of the city, with some 200 staff comprising various nationalities from the upstream and downstream operations stationed there.

The company is now only occupying one floor, with a minimal number of staff taking up the space.