PetDag expected to review NGV business amid slower demand

NGV, which is mainly consumed by the taxi industry, has seen a significant decrease of between 15% and 20% over the past 2 years


PETRONAS Dagangan Bhd (PetDag) is expected to review its natural gas for vehicles (NGV) business as a result of a continuous drop in the fuel’s demand nationwide.

PetDag MD and CEO Datuk Seri Syed Zainal Abidin Syed Mohd Tahir (picture) said NGV, which is mainly consumed by the taxi industry, has seen a significant decrease of between 15% and 20% over the past two years.

“We’ve seen the demand declining in the last couple of years. This is something we are reviewing. We are discussing with the government on what would be the next form of alternative energy for vehicles.

“The government is drafting a programme. The likes of hybrid and electric cars are coming, so there might be a tipping point where people are converting to these alternative energy vehicles,” Syed Zainal Abidin told the press after the launch of the Petronas Mesra and AirAsia BIG two-way conversion points in Ampang, Selangor, yesterday.

According to the Natural Gas Industry Annual Review 2017 report, 77,000 units of NGV vehicles were on Malaysian roads, or only 0.26% of the total 30 million vehicles registered in the country.

Some 103 NGV refuelling stations were operating in 2016, down almost 40% from 178 in 2015.

Based on the Petronas MyMesra website, only 72 Petronas stations are now equipped with NGV pumps.

As Petronas is the only NGV supplier in the country, Syed Zainal Abidin said it is still the company’s obligation to ensure that fuel remains available to consumers, particularly the taxi industry.

“We are obligated to make sure that our NGV stations remain operational to provide NGV to taxis, but since the number is declining, we also need to review and find out the next best thing to do,” he added.

Meanwhile, Syed Zainal Abidin said PetDag also plans to increase the revenue contribution from its non-fuel segment to 30% and 35% in the future from the current 14%.

He said the move would provide long-term sustainability for the company as the standard benchmark of revenue in the region currently stands at around 40%.

Syed Zainal Abidin was responding to reports on PetDag’s 45% drop in net profit to RM172.75 million for the second quarter ended June 30, 2019, from RM314.42 million in the previous year.

In a Bursa Malaysia filing last week, the company said the drop was due to lower margins for its retail and commercial operations.

“It is a very challenging industry and challenging year for us as consumers are very careful in their spending. So, the long-term goal is to focus our core business on increasing our fuel segment, while expanding our non-fuel account.

“That is why we have been trying to invest in the last couple of years, which is the reason that the capital expenditure was high. We are quite confident of what we have invested in and will see the rewards coming in the future,” he said.

As for the Petronas Mesra and AirAsia BIG collaboration, the former is now part of the latter’s instant points exchange platform BIG Xchange.

The project is the two parties’ first partnership with a two-way points conversion — giving BIG members and Mesra members more freedom to choose how they use their loyalty points.

Starting today, BIG Members will be able to link their Petronas Mesra account to their AirAsia BIG account via BIG Xchange, available on the AirAsia BIG mobile app, to instantly convert Mesra points to BIG points and vice versa.

The conversion is 1,250 BIG points for 600 Mesra points, and 2,000 Mesra points for 500 BIG points.