The move is a result of low marketing fees in the retail oil business. The low fees have also forced the company to look into related businesses, including the sale of natural gas for vehicles (NGV), industrial oil products, and the supply of jet fuel at Suvarnabhumi Airport.

"After a year and a half of our presence in Thailand, we are undergoing a business restructure to look into new businesses to compensate for the low marketing fee from the retail oil business. It could be completed in the next few months," said Mohd Aidnil Bin Abdul Razak, managing director.

In 2004, Petronas bought out the entire retail business of Q8 from Kuwait Oil. Petronas last year chalked up a net loss of Bt650 million and Mohd expected further losses this year, due to the company's guaranteed marketing fee of 40-60 satang per litre.

For the same reason, Shell Companies in Thailand also suffered a net loss of Bt820 million last year, against a net profit of Bt743 million a year earlier.

Yesterday, Petronas signed an agreement with PTT Plc for the supply of NGV to its stations. This year, eight stations will sell NGV and the number would be expanded to 20 next year and 30 in 2008.

Petronas now owns 117 stations. It is expected that NGV sales will push down the volume of fuels sold at the stations by 10-20 per cent.

To tap into the jet-fuel market, it will also buy a 3.5-per-cent stake in Thai Petroleum Pipeline Co Ltd and a stake of 2-2.5 per cent in Bangkok Aviation Fuel Services Plc. Through an investment of about Bt300 million, Petronas expects to supply jet fuel to airlines operating at Suvarnabhumi, which is likely to need 15 million to 20 million litres this year.

Mohd said oil retailers have been suffering huge losses. The marketing fees are kept low as retailers cannot adjust retail prices in accordance with global price movements. In addition, they are low due to the marketing policy of giant players like PTT. He urged the government to ensure the fees are at a level that is fair to retailers and consumers.

"If the government lets these conditions go on, it will affect the industry and employment. We're at a disadvantage to others because we have no refinery here," he said.

Caretaker Energy Minister Viset Choopiban, who was at the NGV contract signing ceremony, defended the government, saying it had never intervened on retail oil prices, but oil retailers may need extra income, probably from convenience stores and other services.

PTT president Prasert Bunsumpun said that PTT had no intention of distorting the oil-price structure, adding that the company had stalled on retail price increases to reduce the burden on consumers.

Mohd said that due to the mandatory order to have all stations close after 10pm, sales at individual Petronas stations are as low as 270,000 litres per month. He urged the government to extend the hours to midnight to pave the way for higher sales and to provide a better service for customers.

Petronas sets aside about Bt70 million to Bt80 million to expand 10 to 15 stations each year and increase standards of service.

Energy Reporters

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