Fuel relief: Gas pump price remains, says Petronas head
By Marc Lourdes and Nisha Sabanayagam, New Straits Times
June 12, 2008
KUALA LUMPUR: The pump price of natural gas will stay the same.
This is the assurance given by Petronas chairman Tan Sri Hassan Merican.
He told the New Straits Times that the price would remain although demand was expected to rise as more motorists turn to natural gas in view of the fuel price increase.
Hassan said Petronas would, however, increase the number of stations selling natural gas. Fifty-nine stations will be added to the existing 90 this year, and by 2010, there should be 200 stations nationwide selling gas.
“This is our commitment to the environment.”
Hassan said Petronas was subsidising natural gas directly and heavily. For every litre sold at 68 sen, the national oil company shells out about RM2.
Since 1997, it has coughed up some RM450 million to keep the price of gas low for the 33,058 natural gas-powered vehicles in the country, most of which are taxis.
“We are leaving gas pump price at 68 sen. Our subsidies will go up and up.”
He revealed that Petronas was actually allowed to sell gas at half the price of petrol.
“(But) We did not increase its price, even after the 2006 petrol price hike.
“People say Petronas has not done anything for them, but this is one of the things we have done. This subsidy is above all the taxes and royalties Petronas pays. There is no rebate and exemption for it.”
Only Petronas has natural gas stations in Malaysia, leading to a popular assumption that it has a monopoly on the sale of gas.
Petronas’s first natural gas pilot project was in Terengganu in 1986. Commercial sales began in 1993.
“The main thrust of introducing NGV, not only in Malaysia but all over the world, was to address environmental concerns,” he said, adding that gas, which contains no particulates, is a cleaner alternative to petrol.
Asked why other oil companies were not selling it at their stations, Hassan said it was because they could not turn a profit doing so.
“Because of the subsidy, it doesn’t interest other oil companies to do it.”
He also questioned why other companies were not selling natural gas as part of their environmental responsibility.
“All these oil companies talk so much about climate change and all that. Why can’t they use this as their contribution to clean up our environment?
Attempts to contact Shell and ExxonMobil for comments brought no response from either company.
On why there were not enough stations selling gas, Hassan said Petronas faced various obstacles, including land acquisition and local authority policies.
Logistics is also an important factor, as NGV stations need to be close to a gas pipeline. However, 15 stations in the country get their supply through trucks with compression tanks.
“This is not only very costly, but also dangerous.”