Don’t stop at giving Petron right to supply fuel to govt vehicles

There is really no competition at the retail level for petroleum products such as petrol and diesel in Malaysia.

All brands are selling at the same price. In fact, at the retail level, petroleum corporations are behaving like a giant cartel.

Rightly, the government should not give any undue advantage to Petronas or any other oil company. Each should compete on a level playing field with the rest in the country.

Petronas should thrive based on competition rather than protection. However, as a national oil corporation, Petronas does enjoy some advantages. Be that as it may, I think the relative success of Petronas when compared with other national oil corporations in other countries is due to the government allowing for competition rather than protection.

Rightly, all government purchases should be based on value for money and a level playing field. The government should provide the same opportunities to all suppliers operating in the country.

The recent move by the government to include Petron as an additional supplier of fuel to government vehicles is a good idea but it does not carry the idea far enough. Why stop at Petronas and Shell earlier (as decided by the previous government) and why only include Petron now?

Former prime minister Najib Razak is now questioning why the new government has sidelined Caltex and BHP? Well, I think he should have asked the same question when he was in power: why did he favour Petronas and Shell and sideline Petron, Caltex and BHP?

If the government values competition and a level playing field, it should have provided opportunities to all oil corporations and not base it selectively on some subjective criteria.

If Malaysia wishes to adhere to the market economy, the government must provide the signal to all businesses that it disdains favouritism and monopolies. We can’t expect businesses to behave when the government indulges in “anti-competition” behaviour.

Fuel is not the only item where the government practices discrimination. The government has also purchased other goods and services selectively and discriminately. The banking service is one example where one or two banks are given an advantage over others.

Even in the privatisation of government services, it has not taken any precaution to ensure greater competition to drive down prices and enhance efficiency. Vehicle inspection service is one example where the monopoly created has hindered service efficiency and cost savings. It is not difficult for the government to allow more vehicle inspectors, rather than just Puspakom.

If the government avails itself to more service providers, I am sure it can get better service at a lower cost.

TK Chua is a FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of FMT.