Petronas upgrading petrol stations and opening 15 new stations

Petronas will focus on upgrading and refurbishing its existing petrol stations and retail convenience stores this year, aside from plans to open between 10 and 15 new stations.

Chairman Datuk Md Arif Mahmood said the company’s key focus was not to grow its number of petrol stations, but to boost sales at its facilities with new offerings and partnerships.

The company, which has a capital expenditure of RM300mil for the year, has seen its previous and ongoing promotions boost fuel and non-fuel sales, with its retail segment continuing to be its highest revenue contributor. The segment saw revenue increase by 17% year-on-year in financial year 2017 to RM13.8bil on the back of higher average selling prices.

“We have the largest network in Malaysia today with about 1,045 stations.

“The key focus for us will not be to grow the network much, although we are looking at opening 10 to 15 new stations. “We are focusing more on upgrading our existing stations and particularly our convenience stores to boost sales,” he told reporters after the company’s annual general meeting here.

He said the company’s efforts to boost sales, which include loyalty programmes and partnerships with ride-hailing service Grab, had also benefited its petrol dealers who are impacted by the volatility in the weekly retail fuel prices.

“In 2017 and moving into 2018, we already have initiatives to assist dealers face the challenging market. “We are revising the licence fee, providing better royalty programmes and offering better sales incentives for our dealers,” he said.

He added that they also had guaranteed margins for the petrol station dealers.

On the volatility in crude oil and pump prices, managing director and chief executive officer Datuk Mohd Ibrahimnuddin Mohd Yunus said they were managing this by pushing for efficiency in the management of inventory.

“The volatility impacts working capital and gains or losses on inventory. “To manage this, we are pushing for ultimate efficiency in managing inventory - our inventory holding days are now between four and four-and-a-half days,” he said.

In the commercial segment, the company holds about a 70% share of Malaysia’s aviation jet fuel market, and recently secured deals with three more international airlines.

Last year, the segment’s revenue soared by 33% to RM12.8bil on the back of volume growth and higher average selling prices.