Dealers responsible for lower earnings if sell below pump prices - PetDag

Petronas Dagangan Bhd''s (PetDag) earning will not be affected if its dealers sell the oil at a lower rate after seeking approval from the government.

"If it is the dealers who do that, they should take the responsibility (of the reducing earning), not us," said its Managing Director/Chief Executive Officer, Mohd Ibrahimnuddin Mohd Yunus.

He told a press conference this after the company''s annual general meeting here today.

However, Mohd Ibrahimnuddin said PetDag had asked its dealers to talk to the company first before approaching the government for fuel prices reduction.

"At the end, it is all depends on the volume and margin to make up the earning," he said, adding that currently, there was no plan to lower the fuel prices but to follow the rates set by the government.

To-date, there over 1,000 Petronas stations nationwide and the company continues to be the leading petroleum retailer in the country.

Meanwhile, PetDag Chairman, Md Arif Mahmood, said the company was expected to set up less than 10 new stations this year.

"We have not identify any specific areas but are looking at high-density areas which are not fully served yet," he said.

He also said the company would set aside about RM400- RM500 million in capital expenditure (capex) this year, up from last year''s RM227.7 million.

He said the capex would mainly be used for outlet revamp and upgrade.

On the company''s intention to quit its Vietnam-based liquified petroleum gas (LPG) storage and bottling subsidiary, Thang Long LPG Co Ltd (TLLCL), Arif said, the company did plan to sell it.

"Yes, we do plan to sell it, but if things do not work out, we may liquid it," he said.

He, however, declined to elaborate.

It was reported that PetDag faced an obstacle to divest its LPG business in Vietnam following Totalgaz Vietnam Ltd Liability Co''s decision to cancel the deal to buy TLLCL.

Moving forward, Mohd Ibrahimnuddin said, the company would tie up with more original equipment manufacturers (OEMs) on the lubricants segment for high value and better return business for the company.

Last year, he said, the company had signed an agreement with Japanese Honda to be the first non-Japanese lubricant supplier for OEM.

On the LPG segment, Mobd Ibrahimnuddin said, the company was looking at expanding its service to high -density areas or areas that it had yet to fully serve.

-- BERNAMA