Posted by wltan22 > 2017-03-04 19:07 | Report Abuse

http://english.astroawani.com/malaysia-news/govt-considering-ceiling-oil-price-johari-131811

Posted by wltan22 > 2017-03-04 19:17 | Report Abuse

逍遥子, might as you said with ceiling price and operators freely decide selling price

Posted by probability > 2017-03-04 19:46 | Report Abuse

petdag thin margin...cant afford to price lower than ceiling price...petron will easily pull the customer's in even with a 1 cent discount.

Like that means day and night Petron station will be full of cars...

The Refinery would have to start to fully supplying all its Refined products (Petrol & Diesel) to its own gas stations to cope up then...

My estimation says only 50% of its Refined products goes to its own Gas stations currently (based on latest quarter revenue figures).

Posted by OOMMGG > 2017-03-04 19:48 | Report Abuse

Short term will be good for consumer as competition get intense. However in long term , the stronger will stay strongest and might monpoly the market which is not good to consumer.

Posted by zoizai > 2017-03-04 20:01 | Report Abuse

So Monday will up?

Posted by probability > 2017-03-04 20:45 | Report Abuse

you know whats going to happen...the ceiling price will have an added BUFFER just like the 'Alpha of 5 & 4 cents' for Petrol & Diesel respectively...it will cause them to price even higher than usual based on MOPS values.

And none of the gas station retailers going to move a single cent lower than the ceiling.

The reason Gov came out with this...is coz they are fed up with the changing Crude price and RM-USD exchange rates...causing them to significantly alter the price of Refined products on certain months causing either the Oil Company or the Consumer to gain / lose significantly.

By having a buffer and a more frequent adjustment flexibility...the Oil Company's interest and government's reputation, and feelings of consumers are taken care.

Posted by 逍遥子 > 2017-03-04 20:58 | Report Abuse

I m not too sure how the market will react ? However I personally think Petronm will have some competitive edge, due to ：

1）They have their own refinery, which allow them to have more room to squeeze some margin out for price discount. If u remember few months back Petronm did a promotion of $1 free voucher for every $45 petrol purchased, and that is 2.22% discount, so that is another form of discount.

2) Petron Corp had been running this kind of free floating petrol retail business back in Philippine for many years, they will have the necessary experience to compete with others.

3) Out of 580 petrol stations, 70% is fully own by Petronm & 30% own by franchisees, the franchisee % is lower compare to Petronas Dag, hence Petronm will have more flexibility in term of prices movements.

Besides all the above, I also personally think that this semi open floating system is good for petrol retail business cause now the price is revised weekly hence margin squeeze period will be shorter.

Posted by LowProfile > 2017-03-04 21:33 | Report Abuse

we will see... this is getting even more interesting now... it is a mixed feeling as it can be view either way be it good or bad...

Posted by sumato88 > 2017-03-04 21:39 | Report Abuse

Don't worry, guys. I think the weekly price adjustment is positive for petrol station operators as they wouldn't lose when consumer rush to pump cheap petrol every month end when price increase, leaving the petrol station operator holding higher cost of inventory when sales become weak in the first week of the month. In a nutshell, more timely cost pass through. The risk for severe price war is not too high as Malaysia is a saturated market which gives no reason to fight market share at the expense of profit.

I think the competition will be rationale and net effect from this policy shall be positive. In Australia where petrol price is free floated, the price difference between different operators is 1 cent. Personally, I don't think I will go for the cheaper petrol station just because of 1-2 cents difference. By patrolling around to find for the cheapest, you probably already lose more than 1 cent.

Posted by suregain > 2017-03-04 21:49 | Report Abuse

Yalo wasting time to search for petrol station.. Just stick to the petrol station tat u used to pump.. Always change petrol is even detrimental to your engine.. In d end, when engine problem arise, then u need to fork out substantial money to fix it..

Posted by pitbull > 2017-03-04 23:48 | Report Abuse

My suggestion is..
We spend money on petro
Then we earn back money from petronm

Posted by cheoky > 2017-03-04 23:57 | Report Abuse

got sumato and yao zi here with their thoughts. no need to panic. sleep on the couch and follow them will do.

Posted by Jay > 2017-03-05 01:04 | Report Abuse

if ceiling price is indeed implemented, my personal view is

1. consumer fatigue will kick in at some point

there could be some initial competition among petrol stations and consumers could flock to the cheaper station at first, but this likely won't sustain. imagine if the price difference is minimal and petrol prices change every week, soon consumers may not pay as much attention anymore.

imagine constantly monitoring your car fuel level, global fuel price trend and the prices of each petrol station etc.to plan when and where to refill your petrol

2. price competition unlikely to be intense (as what we have seen in telcos)

first thing I thought about price competition was telcos, but I soon realise it's unlikely

many people wonder why our local telcos, being an oligopoly (few major players) market, would see such sudden intense competition. the reasons are simple, excessive margins and an aggressive new player.

our major local telcos, even after all the competition for the past 2 years are still getting EBITDA margin of 40-50% against regional peers of 30-40% (maxis latest quarter still >50%). such excessive margins provide the perfect opportunity for new players like umobile to come in, providing services at a lower rates and margin for market share

for retail petrol, profit per litre (32c) has always been regulated by the government, there may not be much room for cut. besides, I don't see a umobile esque new entrants who will sacrifice substantial profit margin to aggressively undercut the others for market share. if price difference is minimal, then most petrol stations should be able to cope since they already have ongoing promotions anyway

3. petron has refinery and retail biz. if latest results of petdag, petron and shell are an indication, it was the refinery biz that was the major reason behind the explosive profit of petron and shell. petdag being a pure retail player, profit was relatively stable. so for short term, it will still be the refinery biz that will drive its profit up although retail biz will still be the main cash machine

so all in all, I think weekly pricing is positive for petron than monthly pricing. ceiling price mechanism would be slight negative, but impact on bottom line is likely to be minimal. short term will be supported by refinery while long term any competition is likely to rationalise

Posted by Jay > 2017-03-05 01:11 | Report Abuse

just to share some data (average 4Q16 vs 2M17)

Brent (USD/bbl) 51 vs 55
Brent (RM/bbl) 220 vs 248

Crack spread index
European: 9.4 vs 9.8
Asia Tapis: 6.8 vs 8.7
Asia Minas: 11.0 vs 12.1

data is looking good :)
if monday price drop, perfect time to collect

Posted by skyea > 2017-03-05 05:59 | Report Abuse

from now on everyone call their family and friends pump petron w do ady. then there w be no worries. the power of the people

Posted by wltan22 > 2017-03-05 11:30 | Report Abuse

good discussion, good sharing from Yao Zi, Jay, probability, sumato and many more form this forum, with limited resources and information, with few assumptions, come to conclusion that, less negative impact, the company might have some upper hand on the announcement...to me...still a buy...haha...don't mark my words

Posted by aaroncjs > 2017-03-05 12:00 | Report Abuse

@jay may i know how to search this crack spread index online?

Posted by aaroncjs > 2017-03-05 12:01 | Report Abuse

@Jay

Posted by Jay > 2017-03-05 15:57 | Report Abuse

@aaroncjs I can't find it online, got my friend's help to download through Bloomberg

Posted by Equityengineer > 2017-03-05 20:46 | Report Abuse

Only one of the options considered. Come on all. Nothing that certain and reading the news there is more uncertainty than any constructive proposal. would only consider this news as noise. Anyway it was a good opinion from those whom shared.

Prefer to look at big picture, especially Crude oil and MOPS index, Dollar strength, that Jay shared as Crack spread index(not sure how to make use of it yet). Looking forward the next Quarter at least to make decisions.

Posted by Jay > 2017-03-05 22:54 | Report Abuse

based on the news, seems like it was indeed ceiling price. but now petroleum dealers association has came out to criticise it, citing lack of consultation. let's see how powerful is this association

Posted by Jay > 2017-03-05 22:56 | Report Abuse

typical malaysia government, rash decisions without consulting stakeholders, even good ideas will be let down by poor implementation

Posted by wltan22 > 2017-03-05 23:11 | Report Abuse

http://www.mysinchew.com/node/117100/tid=13

Posted by stockmanmy > 2017-03-05 23:12 | Report Abuse

Petron and Shell

come 1 April, retail price of petrol will be adjusted weekly instead of monthly.

This also means results of Petron and Shell will not fluctuate wildly like before...also means Petron and Shell becomes more investable. with more stable earnings.

This, I assume is one of the things the Chinese got from the government when they took over Shell.

Posted by wltan22 > 2017-03-05 23:17 | Report Abuse

@Jay, this was the association concerned: ""If ceiling price is set weekly, large companies with sound financial ability will be able to sell petrol at lower prices over a long period of time. Eventually a few large companies will monopolize the market."

Posted by suregain > 2017-03-05 23:21 | Report Abuse

Gov buat kerja membabi buta

Posted by wltan22 > 2017-03-05 23:31 | Report Abuse

since Petron has best of both worlds, whatever announcement from gov, should able to sustain, I believe Shell, Petdag and Petronm as Top 3 who has the economy scales

Posted by paperplane2016 > 2017-03-06 02:04 | Report Abuse

http://www.winrayland.com/2017/03/fuel-price.html

Posted by paperplane2016 > 2017-03-06 02:04 | Report Abuse

Price war soon!

Posted by sirzack > 2017-03-06 04:25 | Report Abuse

simply don't understand all these so-called weekly stuffs...really hope it will benefit consumers

Posted by OrlandoOil > 2017-03-06 07:45 | Report Abuse

Anybody know PetroM own how many petrol stations run by itself not by petrol dealers?

Posted by OrlandoOil > 2017-03-06 07:51 | Report Abuse

Margin sure wil drop rakyat tak tahan higher n higher cost of living d

Posted by Equityengineer > 2017-03-06 09:35 | Report Abuse

https://paultan.org/2017/03/04/fuel-price-ceiling-to-be-announced-weekly-from-april/

Posted by zoizai > 2017-03-06 09:35 | Report Abuse

Go go go Petronm

Posted by suregain > 2017-03-06 11:33 | Report Abuse

stil pressurise by seller

Posted by Stock Kingdom > 2017-03-06 15:37 | Report Abuse

Petrol station operators are more like oligopoly type of businesses, very few players controlling market, new comer is technically no way to enter the market, price war is unlikely soon. But not sure in long run

Posted by zhangliang > 2017-03-06 16:53 | Report Abuse

why not moving... market so strong

Posted by Equityengineer > 2017-03-06 17:19 | Report Abuse

It did close high , just that not at highest and whenever price drop someone will pick it up... it's healthy to trade like this a while

Posted by meistsk3134 > 2017-03-06 22:44 | Report Abuse

already stop..

Posted by suregain > 2017-03-07 08:14 | Report Abuse

http://www.thestar.com.my/business/

Posted by suregain > 2017-03-07 08:14 | Report Abuse

Double standard

Posted by suregain > 2017-03-07 08:20 | Report Abuse

Petronas pay yearly dividen to gov.. So gov need to set a policy tat benefit petronas

Posted by Alex Lim Jun Xiong > 2017-03-07 10:59 | Report Abuse

This Petron need great patient, prepare to hold until next quarter.
To me, it worth to wait~

Posted by 逍遥子 > 2017-03-07 11:48 | Report Abuse

Just to share, as like a lot of of other counters, there is a hidden hand behind this counter to manipulate the short term price movements. That is why I said this counter is not suitable for short term play. To make the matter worst, due to low in liquidity the manipulation is much more easy to be done. However if u are in for long term, then no worry, as long as the company can deliver decent results + good dividend then it is only matter of time the share price will catch up.

Cheers

Posted by suregain > 2017-03-07 11:50 | Report Abuse

die die hold

Posted by Equityengineer > 2017-03-07 12:51 | Report Abuse

Hold the share ..

Posted by Davidl > 2017-03-07 12:56 | Report Abuse

Well say 逍遥子! Hope to learn more from U.

Posted by zoizai > 2017-03-07 15:09 | Report Abuse

Why ppl throw ?

Posted by suregain > 2017-03-07 15:27 | Report Abuse

not ppl throw la... tis is sharks' tactic to create fears so that u folow to throw... after tat, it wil up gao gao

Posted by suregain > 2017-03-07 15:51 | Report Abuse

q to buy at 6