KUALA LUMPUR (Sept 24): Malaysia’s plan to restrict subsidised RON95 fuel could potentially hit sales volume at Petronas Dagangan Bhd (KL:PETDAG), said CGS International.

The use of MyKad for verification at pumps and future measures to prevent abuse of the 300-litre monthly allocation may succeed in reducing unauthorised purchases and cut RON95 sales volumes, the house said in a note on Wednesday.

However, “we do not expect fuel consumption by the average Malaysian to be negatively impacted” by the generous volume quota, the house said.

Malaysia will begin subsidy rationalisation of RON95 at the end of September to curb sales of the country’s most widely used petrol grade to foreigners and other ineligible vehicle owners.

Foreign-registered vehicles, meanwhile, are only allowed to be fuelled with pricier, higher-grade RON97.

Petronas Dagangan, which operates the Petronas fuel stations nationwide, saw its sales volume decline year-on-year for two quarters this year following a government crackdown on unauthorised purchases of subsidised diesel in Sabah and Sarawak.

There could be further “downward pressure on sales volumes” from the fourth onwards, which is a “potential derating catalyst” for Petronas Dagangan, CGS International said.

CGS International is keeping Petronas Dagangan on ‘reduce’, equivalent to a ‘sell’ call, noting that its forecast for flat sales volumes in 2025-2027 is at risk from the government measures.