KUALA LUMPUR: Petronas Dagangan Bhd (PetDag) has allocated some RM500mil for its capital expenditure (capex) this year, which will see refurbishments being carried out on its petrol stations and Mesra outlets with new concepts.
Part of the higher capex, compared to around RM300mil last year, will also see the expansion of its petrol station network by five to 10 stations. PetDag currently has 1,057 petrol stations nationwide.
Managing director and CEO Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said the group had substantial land bank and was now looking at how to operationalise it.
“We’re looking at about 10 new stations. Last year, we did 12. The expansion would be at strategic locations where there are high-volume and high-density populations,” he told a press conference after PetDag’s annual general meeting here yesterday.
Asked about the impact of the possible removal of the petrol price caps when the petrol subsidies for the low-income group is implemented, group chairman Datuk Arif Mahmood said it would be dependent on the disposable income and the lifestyle of the consumers.
“We have to see what the crude oil price would be. Clearly, if you remove the cap and when the price is high, the pump price would go up. We’ll see what the new policies are, then only can we access the impact.
“The ceiling price actually helps dealers, consumers and oil companies in terms of price stability. The feedback from our dealers is that it has helped manage their cash flows,” he said.
Syed Zainal Abidin concurred, saying that it was still too early to determine the impact of the subsidy.
“If it’s meant for the B40, and predominantly Petronas customers are in the B40 group, then I think we are in a good position because we are, by far, the biggest network in the country, but let’s not speculate and wait for the announcement,” he said, adding that Petronas’ net margin for the automatic pricing mechanism or APM has not been revised for the past eight to nine years, so the only way it can make profits is via its efficiency in managing inventory, such as buying low and selling high.
On whether there are plans to axe non-performing stations, Arif said while rationalisation is part of the company’s strategy, it also looks into its entire network as a whole, how to optimise its logistics and also how to look after the interest of the people.
“It’s not just about profits in Petronas. It’s profits and also the well-being of the people.
“Shareholders’ requirement, company requirement, leaders and consumers are things that we look at to strike a balance to continue to give good returns to our shareholders,” he said.
Moving forward for 2019, Md Ariff said PetDag would continue leveraging on digital and its network of partners to further enhance the seamless and frictionless customer experience for its customers.
Setel, which is the first e-payment app of its kind that is integrated directly to the fuel pump, has done more than 100,000 transactions since it was launched at the end of November last year.
The app has about 100,000 users now. The usage is available at around 100 Petronas stations in the Klang Valley. It will be rolled out to the entire Klang Valley by May.
Md Ariff said there would be more partners coming on board and more features in the app, which would also be tied to the company’s non-fuel business.
“The societal behaviour has changed. What convenience is to customers now is different from what it was back then. We’re trying to leverage not only on the physical but also the virtual space.
“We’ve done an ethnography on the consumer pinpoints and we’ll be developing new products with new partners to increase our non-fuel income, and at the same time, complement the fuel income,” Md Ariff said, adding that they have set a high target for non-fuel contribution at 30%. The current rate is about 12%.