Petronas Dagangan sets higher capex of RM500m for 2019

Petronas Dagangan Bhd has set aside a higher capital expenditure (capex) of RM500 million for 2019. — Picture by Yusof Mat Isa
Petronas Dagangan Bhd has set aside a higher capital expenditure (capex) of RM500 million for 2019. — Picture by Yusof Mat Isa

KUALA LUMPUR, April 25 — Petronas Dagangan Bhd (PDB) has set aside a higher capital expenditure (capex) of RM500 million for this year and is leveraging on the ride-hailing trend to boost sales.

The domestic marketing arm of Petroliam Nasional Bhd, which allocated RM300 million for capex last year, will however continue to spend a large portion of the fund to open more petrol stations and refurbish its existing stations as well as Mesra convenience stores.

PDB chairman Datuk Md Arif Mahmood said the company would continue to strengthen its position and planned to add about 10 new petrol stations to the existing network of 1,057 stations nationwide. Last year, PDB opened 12 petrol stations.

“On ride-hailing, we have been incentivising Grab Malaysia drivers to fill up at our stations so we will capitalise on ride-hailing services to increase sales,” he told a press conference after the company’s annual general meeting here today.

According to PDB’s 2018 annual report, the higher penetration of ride-hailing users and the increasing number of energy efficient vehicles (EEVs) and hybrid vehicles sold in Malaysia have impacted fuel retailers.

Md Ariff explained that the company would move along with the trend rather than go against it.

“In fact, we are considering our petrol stations to be pickup places for ride-hailing,” he added.

Meanwhile, responding to a question on how the potential removal of RON95 petrol’s price cap would affect the company, he said that impact would only be visible after it came into effect.

“Everyone is aware that we are using a managed float system. It is based on the product price in the market and now crude oil is traded above US$70 per barrel and we need to see what’s the direction of the price.

“On how it would affect the (consumption) volume, it would be based on disposable income and we need to see the new policy — whether they (the government) will increase the ceiling price or have no ceiling at all — before we can assess the impact,” he said.

Earlier this week, Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail said the cap on the RON95 price, currently at RM2.08, might be removed when a new petrol subsidy for Bantuan Sara Hidup recipients came into effect. An online news portal reported today that the Petrol Dealers Association of Malaysia wanted the government to maintain the price cap.

Md Ariff said the current system provided stability for dealers, oil companies as well as the consumers.

“Price stability helps dealers in managing cash flow,” he explained.

Asked on Petronas’ e-payment solution Setel, PDB managing director and chief executive officer Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said about 100,000 transactions were recorded since its launch in November 2018.

“It is on track to being available nationwide by year-end,” he said.

PDB’s net profit for the financial year ended Dec 31, 2018, narrowed to RM849.85 million from RM1.54 billion in 2017, while revenue increased to RM30.07 billion compared with RM27.42 billion in the previous year.

The company attributed the weaker profit mainly to the lower petroleum product prices in November and December last year. — Bernama

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