Why did Sarawak decide to consolidate LPG distribution under Petros Niaga?

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Sarawak Consolidates LPG Distribution Under Petros Niaga

Sarawak has decided to consolidate Liquefied Petroleum Gas (LPG) distribution under Petros Niaga Sdn Bhd, a subsidiary of Petroleum Sarawak Berhad (Petros), effective December 1. This decision stems from the Sarawak government's choice not to renew the LPG distribution license of another company, which expires at the end of November. Consequently, Petros Niaga will assume full control of the LPG market in Sarawak.
Transition to Sole LPG Distributor

As of December 1, Petros Niaga Sdn Bhd will be the exclusive distributor of LPG across Sarawak. This transition follows the state government's decision to not extend the distribution license previously held by another entity. Prior to this change, Petros Niaga commanded a 68% share of the LPG market, with an unnamed company holding the remaining 32%. The amendment to the Distribution of Gas Bill 2023 further empowers the state government to designate Petros as the central gas aggregator.
Expanded Role for Petros as Gas Aggregator

The state-owned entity, Petros, will now function as a gas aggregator, a role for which it possesses established experience and licensing as an LPG distributor. This new capacity will see all licensed entities involved in gas distribution, supply, and sale within Sarawak mandated to procure and deliver their gas to Petros. Petros will then be responsible for the procurement and subsequent distribution to all consumers, including Liquefied Natural Gas (LNG) plants, at equitable prices.
Aggregator Functions and Assurances

The designated gas aggregator, Petros, will manage the procurement of natural gas from all available sources for distribution throughout Sarawak. Its responsibilities will also encompass the development, expansion, management, and maintenance of the state's gas distribution network and systems. Assurances have been made that this consolidation will not negatively impact existing agreements with upstream gas producers, with the Sarawak government reiterating its support for their operations.

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Why did Sarawak decide to consolidate LPG distribution under Petros Niaga?

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