Monday 24 April 2017

Petronas dealers free to offer discounts on fuel prices


According to a report by The Star, Petronas will allow its dealers to lower fuel prices at their pumps below the weekly ceiling price set by the government. However, it stressed that dealers looking to do so must seek the approval of the domestic trade, cooperatives and consumerism ministry (KPDNKK), and discuss such a move with Petronas Dagangan (PetDag) beforehand.

“If dealers decide to sell at a lower price, they are responsible for their margins and not us. It is all tied up with sales volumes and margins,” said Mohd Ibrahimnuddin Mohd Yunus, PetDag managing director and CEO. He added that the price-setting mechanism does not impact PetDag’s earnings.

“Last year, we cut our inventory day to four to five days from six a year earlier. We are looking to cut our inventory days further, especially with higher volatility in world crude oil recently,” PetDag chairman Md Arif Mahmood chimed in.

“It is not a new mechanism that is giving us more money. It is still under the same managed float system. The only difference is that this is just a shorter timeline and is better when it comes to managing the volatility of global crude prices,” he explained.

The weekly fuel price announcements began three weeks ago, and fuel retailers are currently not allowed to offer discounts on fuel, and must follow the retail price set by KPDNKK. As of now, RON 95 is priced at RM 2.27 per litre; RON 97 at RM2.54 per litre; Euro 2M diesel at RM2.21 per litre; and Euro 5 diesel at RM2.31 per litre.

- Source: paultan.org

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