Court upholds non-renewal of LPG licence for MyGaz in Sarawak

KUCHING (July 3): The Kuching High Court today upheld the decision of the Director of Gas Distribution not to renew the licence for MyGaz Sdn Bhd to sell or distribute subsidised liquefied petroleum gas (LPG) in Sarawak when it expired on Nov 30, last year.

Judicial Commissioner, Dato Faridz Gohim Abdullah, ruled that the decision not to renew the licence was in line with the Sarawak Government’s public policy to have more Sarawakians and Sarawak companies involved in the business of gas distribution particularly in the distribution of subsidised LPG.

The court would not intervene in any decision made based on government policy, so as not to transgress into the matters under the Executive arm of Government.

Further, he ruled there was no basis for the court to intervene in the circumstances of this case.

He said the facts and the law showed that MyGaz has no legitimate expectations to have its licence to sell subsidized LPG renewed as and when such license expires.

The renewal of such a licence is at the sole discretion of the Director and in this case, his decision was based on government policy and hence cannot be challenged in Court.

The High Court also ruled that the Director of Gas Distribution had not acted unfairly as MyGaz’ licenses to import LPG or sell unsubsidized LPG in Sarawak remain unaffected. MyGaz was ordered to pay RM30,000 costs to the respondents.

MyGaz named the Director, the Minister of Utility and Telecommunications and the Sarawak Government as respondents.

MyGaz, which is majority owned by a company in Thailand, had been selling subsidised LPG throughout Sarawak, in its trademark yellow cylinders, since 2013.

Originally, MyGaz was licensed by the Domestic Trade, Consumer Affairs and Co-operatives MInistry under the Control of Supply Act, 1961, to sell subsidised LPG in Sarawak.

After 2018, the licences for distribution of gas in Sarawak have been issued by the Director of Gas Distribution under the Distribution of Gas Ordinance, 2016, and the federal ministry no longer has the power to issue such licenses.

When MyGaz’ licence expired on Nov 30, last year, the Director refused to extend the term of its license.

MyGaz was, however, allowed to import LPG from Thailand to Sarawak and to sell unsubsidised LPG to commercial and industrial consumers, who unlike domestic users, are not entitled to buy subsidised LPG.

The sale and distribution of subsidised LPG to domestic customers is now undertaken solely by a subsidiary of Petros, called Petroniaga Sdn Bhd.

On Dec 14, 2023, MyGaz applied to the High Court in Kuching for judicial review to quash the Director’s decision not to renew its license and for an order or Mandamus to compel the Director to issue MyGaz with such a licence.

MyGaz was represented by Alvin Yong. Acting for the respondents were State Legal Counsel, Dato Sri JC Fong, who was assisted by legal officers Voon Yan Sin, Khairul Kabir and Simson Sim.