KUALA LUMPUR – Several economists have called for calm over calls to boycott Petronas, saying the national oil and gas firm has contributed immensely to the growth of Bumiputera-owned companies and the country’s development.
Prof Yeah Kim Leng from Sunway University’s business school warned that the “misdirected” collective boycott call could jeopardise the retail performance of Petronas.
“It is even more damaging to the country and its citizens when the targeted firm is the national oil company, which has contributed immensely to the country’s development, especially to the Bumiputera community, since its establishment.
“Any boycott of Petronas will drive business to the other petroleum companies and hurt the largely Bumiputera-owned petrol stations,” he said, advising consumers against being distracted.
Nonetheless, he said Petronas’ upstream activities in crude oil and gas exploration, production and refining – which contributed the bulk of its revenue – would not be disrupted.
The economist, who is one of Prime Minister Datuk Seri Anwar Ibrahim’s advisers, said Petronas’ supply and support services, as well as its downstream activities, had benefited many Bumiputera-owned companies.
“Being a global and Fortune 500 company, its management has been exemplary and its professional and merit-based practices have certainly contributed to its global standing and international success.”
Meanwhile, Malaysian Institute of Economic Research head of research Shankaran Nambiar has said such resistance is expected when a firm deviates from its “pre-existing model where merit is not the sole criterion”.
“There is concern from certain quarters that there is a shift from a model that is rooted in ethnic considerations and wealth redistribution that follows such principles. A policy statement and engagement ought to have preceded the revised criterion.”
Although agreeing that the boycotts will cause a dent in Petronas’ financial performance – and in turn, its contributions to the country – Nambiar said it would be a short-term cost, for longer-term gains.
“By long-term gains, I mean the transition to a phase where efficiency will be prioritised, and the costs of rent-seeking eliminated.
“If the boycott is only for a week, the losses may not be severe. We cannot be too sure how much support this call will attract – it may not be substantial,” he said.
Prof Mohd Nazari Ismail from University Malaya’s faculty of business and economics immediately rubbished the possibility of a boycott, saying it was influenced by parochialism.
“(It is a) ridiculous idea based on a narrow attitude of parochialism… nobody is joining the protest. So, there is nothing to worry about,” said Nazari, who is also the chairman of BDS (Boycott, Divestment, Sanctions) Malaysia.
Previously, Perkasa president Syed Hassan Syed Ali expressed his disappointment with Petronas for not prioritising Bumiputera firms for projects, and urged Malays to boycott Petronas stations for a week if the firm continued to “not help them”.
Subsequently, Malay Businessmen and Industrialists’ Association of Malaysia president Mohd Azamanizam Baharon said a solution had been provided during a meeting between Petronas and its subsidiary, Gentari Sdn Bhd.
The recommendation centres on the creation of a consortium consisting of qualified solar industry players who can be considered potential contract holders in the future.
In March, Petronas appointed Solarvest Energy Sdn Bhd, a unit of Solarvest Holdings Bhd, to install solar power systems at more than 300 Petronas stations nationwide.
However, Petronas president and group chief executive Tan Sri Tengku Muhammad Taufik Tengku Kamadjaja Aziz said the appointment was merit based, and Bumiputera companies under a list by the Sustainable Energy Development Authority were included but unsuccessful in the selection process.
Nonetheless, he said the contract was not worth hundreds of millions – as claimed by certain quarters – and Petronas would work to enable smaller consortia and alter its contracting strategy to enhance Bumiputera participation. – April 5, 2024
