PetDag’s portable container system set to be a success

PETALING JAYA: Petronas Dagangan Bhd’s (PetDag) mobile refuelling service ROVR introduction of its first mini portable container system (PCS) in Sabah is expected to support the group’s portfolio performance in the long run.

MIDF Research said in its latest report that the PCS, which provides easy access to fuel in the rural areas will result in increasing fuel demand, and later increasing sales.

PetDag also planned to expand the programme to more remote areas of Sabah and Sarawak, with potential locations up to 50km from a petrol station.

During the PCS test period, which began in late November 2021 and ran daily from 7am to 7pm, the 5,000-litre mini PCS served about 3,500 vehicles and dispensed over 30,000 litres of petroleum.

MIDF Research noted the recent mini PCS launch further validates PetDag’s strategy of providing solid business solutions that also serve community needs and is fully aligned with PetDag’s promise to make life simpler and better for its consumers.

“Through this programme, it is expected that local communities in rural areas will be able to carry out their everyday activities more easily with improved access to fuel at retail pump prices, promoting the development of small-scale entrepreneurs and boosting the local economy,” added the research house.

In addition, PetDag’s ROVR has proven to be critical during crisis, serving restricted areas under the enhanced movement control order and flood-affected areas. ROVR’s initiatives include a mobile fuel delivery service in partnership with Malaysia Airports Holdings Bhd – delivering 2,000 litres of diesel to refuel the vehicles on the operation ground of KLIA2.

It has also been expanded beyond the Klang Valley to Pahang and Johor. In addition to rural areas, the programme was also pushed to a major port.

The mini PCS is not relatively new in Malaysia, said MIDF Research, adding that the previous initiatives by smaller companies had a high success rate in villages and remote locations where roads do not lead to a quick access to fuel.

Consequent to the establishment of PCS, small entrepreneurs in the operation of the PCS were created, employment opportunities were elevated and other businesses like mini-marts and vehicle workshops were opened.

“These had enabled the PCS locations to generate economic activities successfully, as well as increase the preparedness for fuel demand in the face of natural disasters,” explained the research house. However, MIDF Research made no changes to PetDag’s earnings estimates given that “the group’s PCS initiative has just started in Beaufort, Sabah.”

“We have yet to see any expansion to other states and inclusion of retail and maintenance to support the heightening of the socio-economy aspects of the remote area where the mini PCS is placed,” it added.

For that, it maintained a “neutral” call on PetDag with an unchanged target price of RM20.25.

While the impact of the Covid-19 pandemic remains as much as the fear of a sudden lockdown, MIDF Research also continues to see PetDag positively for the prospects in its local partnerships, the oil price hike, and the rising demand recovery nationwide for fuel as more people are expected to travel in calendar year 2022.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

Africa objects, Malaysia has reservations, on US push to reform health rules at WHO
GLOBAL MARKETS-Stocks tumble on growth concerns, bond yields slip
Oil steadies after choppy trade, US says export ban not ruled out
Ekuinas exploring key investments
Putin’s state oil champion suffers biggest production drop
Zafrul: Economy in the right direction
Strong first-quarter performance for UMW
Rafiza Ghazali is KAF’s Digital Islamic Bank CEO
Sime Darby 3Q net profit dips 18.67%
Farm Fresh net profit jumps 51% to RM17.7mil in 4Q

Others Also Read